CBS Second-Quarter Profit Jumps 10-Fold on Ad Rebound

CBS Corp. Chairman Sumner Redstone
CBS Corp. Chairman Sumner Redstone attending the Milken Institute Global Conference in Los Angeles. Photographer: Jonathan Alcorn/Bloomberg

CBS Corp., owner of the most-watched U.S. television network, said second-quarter profit surged 10-fold as advertisers returned to buying TV and radio commercials.

Net income increased to $150.1 million, or 22 cents a share, from $15.4 million, or 2 cents, a year ago, New York- based CBS said today in a statement. Sales jumped 11 percent to $3.33 billion, exceeding the $3.25 billion average of 15 analyst estimates compiled by Bloomberg.

CBS’s gains in television advertising will accelerate with fourth-quarter political spending, Anthony DiClemente, an analyst at Barclays Capital in New York, wrote in a report ahead of the results. Two-thirds of CBS’s revenue stems from ad sales, the most among U.S. media companies with broadcast networks.

Adjusted for some items, CBS said earnings per share of 25 cents exceeded the 21-cent average of 18 analyst estimates.

TV advertising gains this quarter will be smaller because of difficult comparisons, DiClemente said. He said the company’s improved balance sheet may lead to a return of capital to investors through share buybacks or an increased dividend.

CBS, controlled by Chairman Sumner Redstone, fell 29 cents, or 1.9 percent, to $15.01 at 4 p.m. in New York Stock Exchange composite trading. The shares have climbed 6.8 percent this year.

The company signed a 10-year agreement yesterday with Comcast Corp., the biggest U.S. cable operator, that provides compensation for carrying signals from CBS stations.

CBS has said it’s aiming for $250 million a year in total retransmission fees by 2012, a goal CBS Chief Financial Officer Joseph Ianniello called “conservative” on a February conference call. The amount is based on monthly fees of about 50 cents per subscriber, Ianniello said at a June analyst conference.

(CBS executives will discuss results on a conference call today at 4:30 p.m. New York time. To listen, dial +1-888-452-4007 in the U.S. and +1-719-457-2603 for others.)


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