CBS Radio Q2 Revenue Falls 8%
August 3, 2006 at 6:05 AM (PT)
CBS CORP. second quarter overall revenues fell 1% to $3.48 billion, blamed by a decline at radio, which dropped 8% to $519.1 million. Net earnings from contiuned operations rose from $380.1 to $489.8 million (47 to 64 cents/diluted share), and free cash flow rose 2% to $546.2 million.
Radio's revenue hit is being blamed on the soft ad market and "the impact of programming changes at 27 radio stations," which presumably includes the departure of HOWARD STERN and format changes at several stations. Division operating income fell 20% to $219.6 million (although 2005's numbers included a one-time $15 million gain from a station sale and stock-based compensation increased from $600,000 to $3.4 million).
Pres./CEO LES MOONVES said, "Radio has struggled as the marketplace continues to face challenges. Nevertheless, we are encouraged by the early results of many programming changes, particularly during morning drive time. The sale of selected stations in smaller markets will enable us to focus all of our energies on higher-growth markets, and recent initiatives to reduce Radio's cost structure will enhance the turnaround."
The company's guidance is for low single-digit revenue growth and mid-single-digit growth in operating income and earnings per share.