Q2 brought “steady and real” improvement at CBS


“In every part of the media landscape, CBS content is at the top of its game – and by the way, content is king,” declared CBS Executive Chairman Sumner Redstone as he applauded the management team led by CEO Les Moonves for staying the course and producing some Q2 improvement over Q1 results. Moonves, for his part, declared that CBS is the only TV network which is growing and also proclaimed CBS Radio a “solid contributor” to the company.

Total revenues for the company were down 11.4% to $3.01 billion and operating income before depreciation and amortization (OIBDA) fell 49.1%. But that was still better than Q1 and Moonves proudly noted that the company, even in this recession, produced $351.7 million of free cash flow in Q2.

Television revenues were down 10% to $1.95 billion and OIBDA dropped 40% to $306.7 million. Ad sales were down 13%. A big chunk of that was from weakness at the local O&O station level, with network sales down only 6%. Moonves declared that the CBS Television Network “continues to outperform the competition.” After growing ratings in the past season, Moonves said CBS is also the only network to gain this summer.

Looking at the ongoing upfront, Moonves said “total volume is down this year – we have retained more inventory to sell in the scatter – and we like our position as the economy continues to improve and we maintain our standing as America’s most-watched network.”

CBS is still in the market to sell some of its remaining mid-market radio stations. However, Moonves said the company doesn’t need the cash and won’t sell unless the price is right. The CEO noted that radio sales pacings have been steadily rising for a couple of months. “It continues to be a solid contributor to our company’s results,” he noted. “Many businesses would love to produce 30% margins in the toughest economic environment we’ve seen in decades, not to mention generating strong free cash flow quarter after quarter,” the CEO said of the radio division.

For Q2, CBS Radio revenues were down 23% to $322 million and OIBDA declined 40% to $95.3 million.