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CBS To Sell 50 Radio Stations
NEW YORK -- July 31, 2008: CBS Corp. will sell 50 CBS Radio stations in midsized markets, the company said as it released its second-quarter earnings this morning. CBS Corp. President/CEO Les Moonves said during the company's earnings call Wednesday morning that the planned sale of the stations will let CBS Radio "focus on the larger markets that are showing some real growth, thanks to the successful reformatting and programming changes we've undertaken."
He continued, "Our top stations nationwide did very well in the second quarter, and we expect they will continue to do so, given our new strategy." CBS is planning to use the proceeds from the station sales for a stock buyback.
On the interactive side, CBS closed on its purchase of CNET Networks in the quarter, and Moonves said CNET greatly improves CBS's reach "among the most important demographics in the fastest-growing advertising marketplace."
CBS Radio revenues fell by 10 percent in Q2, to $416.4 million from $463.4 million, and radio OIBDA fell 15 percent, to $158.6 million from $187.3 million in Q2 of 2007. Operating income for the division was $150.7 million, down 16 percent from $179.4 million a year ago.
CBS said the radio revenue results reflected both weakness in the ad market and the impact of station divestitures. On a same-station basis, revenues were down 9 percent.
On the television side, revenue was up 2 percent in the quarter, to $2.2 billion from $2.1 billion, while outdoor saw an 8 percent revenue hike, to $598.1 million from $554.2 million. The publishing division saw a 7 percent revenue decline, to $186 million from $200.3 million.
For CBS Corp. overall, revenue was up by 1 percent, to $3.93 billion from $3.37 billion, while OIBDA fell 12 percent, to $760.4 million from $859.4 million and operating income was off 15 percent, to $637 million from $749.9 million. The company's net earnings were $408.4 million (61 cents per basic and diluted share) in Q2, down from $404 million (56 cents basic, 55 cents diluted) in the same period a year ago. Free cash flow was $464.2 million, compared to $570.5 million in Q2 '07.
"We've taken key steps to position our asset portfolio for superior long-term growth," Moonves said. "During the quarter, we completed our acquisition of CNET Networks, which we believe will add at least two percentage points to our revenue and profit growth rates going forward, in addition to being accretive to earnings and free cash flow in 2008."
Moonves also said that in light of the difficult economy and ad slowdowns, CBS has taken "aggressive cost-reduction actions to manage expenses."
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