CBS Dividend Unlikely?
February 16, 2009 at 7:06 AM (PT)
CBS CORP's quarterly dividend is under threat as a severely depressed advertising market has hurt profit and crimped cash flow, putting pressure on CBS's ability to pay upcoming debt, reports REUTERS. The expectation that the owner of its top-rated namesake network will either slash or ditch its 27-cent-per-share dividend comes just three months after Chief Executive LES MOONVES stressed his commitment to paying an "attractive" dividend, even as CBS posted a $12 billion quarterly loss.
Now, with the media business worsening, analysts say CBS badly needs to conserve cash to meet debt payments and keep its credit rating from falling any closer to junk status.
CBS, which also owns an outdoor advertising business and a collection of TV and radio stations, declined to comment.
Chief among those calling for CBS to sacrifice its dividend is PALI RESEARCH's RICH GREENFIELD. "Previously, we expected CBS to simply cut its dividend in half over the coming six months. However, as the TV station outlook grows more dire, we believe management has no choice but to eliminate the dividend over the coming quarter," GREENFIELD recently wrote in a research note.