Ad revenues up, CBS buying back stock


Total revenues were down 2% in Q3 for CBS Corporation to $3.3 billion, but that was attributed to the lack of five first-cycle TV syndication sales seen a year earlier. Advertising sales were up 10% in the quarter and affiliate/subscription fees rose 15%. Things are going so well that CBS announced plans to buy back up to $1.5 billion of its own stock.

“CBS is firing on all cylinders,” declared Executive Chairman Sumner Redstone as he expressed his confidence in CEO Les Moonves and his management team.

The Local Broadcasting unit was the big growth driver for the quarter. That includes the O&O TV stations and CBS Radio. Local Broadcasting revenues were up 15% to $677.3 million.

CBS Television Stations advertising revenues increased 25%, which the company said reflected the improved advertising marketplace across many key categories, including automotive and financial services, and higher political advertising sales.

CBS Radio advertising revenues increased 9%, also reflecting the improved advertising marketplace.    

Local Broadcasting operating income before depreciation and amortization (OIBDA) increased 49% to $195.1 million.

The strong performance is continuing, with the TV stations pacing up more than 20% in Q4 and radio pacing up by double digits.

The Entertainment division – including CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS Films and CBS Interactive – saw revenues drop 12%, but that was all attributed to the five big syndication sales a year earlier which weren’t repeated this year. CBS Network revenues were up 7% and CBS Interactive display advertising revenues were up 17%. Adjusted OIBDA for Entertainment declined 14% to $277.9 million.

The Cable Networks division saw revenues rise 12% in Q3 to $370 million, attributed to growth at both Showtime Networks and CBS College Sports Network. The other component of the division is Smithsonian Networks. OIBDA rose 33% to $170.5 million.

As it announced quarterly results, CBS Corporation announced that its board of directors had approved a $1.5 billion stock buyback program to launch January 1, 2011. “This new share buyback program reflects the confidence we have in the long-term strength and viability of our business, which continues to generate strong, healthy free cash flow. We have a long-standing commitment to returning value to our shareholders and this initiative speaks to that,” said CEO Les Moonves.

Moonves played down the likelihood of an NFL lock-out next year, saying most recent reports indicate that the owners and players will come to terms. Asked abut his contingency plan, the CEO joked that “Joe and I are going to get out on the field.”