TV, Outdoor Strong for CBS, but Radio Lags

Posts First Full-Quarter Results as Stand-alone Company

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NEW YORK ( -- CBS reported its first full quarter as a stand-alone company this morning and while the radio division suffered without Howard Stern, revenue was little affected.
Leslie Moonves
Leslie Moonves Credit: AP

TV and outdoor led the increase; each had 5% revenue growth. Radio, however, saw its revenue fall by 6%. "We are clearly not yet achieving the level of growth we look for," said CEO Les Moonves, adding that changes were underway to help radio become a "significant contributor to our growth profile very soon."

Mr. Moonves also outlined some of the revenue from its digital media plays: March Madness on Demand delivered 19 million streams of collge basketball tournament games and "north of $4 million in revenue"; and a Verizon V Cast deal, which makes CBS content available to V Cast subscribers, will bring in some $3 million in incremental revenue through subscriptions this year.

'Real' business
"That's genuine growth in what will be a real business for us going forward, and it all goes directly to the bottom line," he said. "So, I think you can see that our ability to monetize content in new ways is rapidly increasing, and there will be many, many more of these opportunities for us in the future."

Total CBS revenue was up 4% from the year-ago quarter to $3.6 billion and diluted earnings per share increased 11% over the same period last year, from 27 cents to 30 cents. Free cash flow, expected to be a hallmark of the stand-alone CBS, was up 12% to $585 million.

Incidentally, today also marked shock-jock duo Opie & Anthony's return to CBS. They're replacing the dismally rated David Lee Roth, who in January replaced Howard Stern in several East Coast markets. The pair, originally served walking papers from CBS for allegedly broadcasting a couple having sex in Manhattan's St. Patrick's Cathedral, has been airing on XM Radio. Last week CBS negotiated a licensing agreement with XM.

Selling off small markets
Mr. Moonves also revisited the topic of selling some smaller-market radio stations to concentrate on top 40 markets. "A process has begun and it's ongoing," he said. While much of CBS's radio woes were due to Mr. Stern's defection to Sirius, even those stations not affected were down 1.5%.

On the TV front, Mr. Moonves touted the network's signing of "Today" show star Katie Couric as its evening news anchor. In evening news, he said, "a single ratings point can translate into tens of millions of dollars." Her switch also changes the morning news landscape, which should help boost the news division across the board.

The CEO also stuck by his earlier upfront prediction that CBS will grow 4% and suggested that might be a little conservative, thanks to the tightening of the market by the formation of the CW. First-quarter "scatter" ad buys haven't, perhaps, been as bullish as the TV networks imply: CBS network revenue was up only 1% -- most of the TV growth came from the studio division, driven by the syndication of "Frasier."
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