CBS Corp. said Wednesday its profits fell 52% in the fourth quarter because of weaker advertising sales and the broadcasting company slashed its quarterly dividend more than 80%.
CBS estimated it would save about $450 million in the remainder of 2009 by cutting the dividend. While the company said it could pay off $1.4 billion in debt maturing in July 2010 with regular cash flows, it said the step will give it greater flexibility.
“When the economy and the credit markets improve, we will revisit the amount of our dividend at that time,” chief executive Leslie Moonves told analysts.
Analyst David Joyce of Miller Tabak & Co. CBS is not seeing worsening ad sales in the first quarter. “It seems that things have not gotten worse.”
CBS said its net profit in the three months to Dec. 31 was $136 million, or 20 cents per share, compared to a profit of $286 million, or 42 cents per share, in the same quarter a year ago. Revenue fell 6% to $3.53 billion.
Analysts expected earnings of 26 cents per share on revenue of $3.56 billion, according to Thomson Reuters.
Moonves also said CBS should benefit in the latter half of 2009 from the sale of five shows into syndication, including Everybody Hates Chris and Ghost Whisperer. Last year, CSI: NY was the only show to follow such a path.
In the past, a single CSI episode was sold into syndication for $1.9 million, Moonves said, highlighting the profit potential for the sale of multiple seasons of several shows. Revenue from the syndicated shows should be in the hundreds of millions of dollars.
“We believe that the second half of ’09 will be stronger than the first, even if the economy does not improve,” Moonves said.
For the quarter, television revenue from the CBS network, stations and studio, fell 8% to $2.21 billion. The figure fell despite higher revenue from political advertisements and increased affiliate revenue—the fees it gets from cable and satellite companies—for such offerings as the Showtime pay TV channel.
Radio revenue plunged 18% to $367 million on weaker ad sales and the sale of several stations. Billboard revenues fell 15% to $526 million.
Interactive revenue more than tripled to $186 million, largely because of the acquisition of CNet Networks Inc. for $1.8 billion in June. Revenue would have risen 1% if CBS had included CNet’s revenue from the previous period.
For all of 2008, the company lost $11.7 billion compared to net profit of $1.25 billion in the previous year. Revenue at CBS fell 0.9% to nearly $14 billion in the year.
