CBS 1st-quarter loss shrinks as revenue rises with ad recovery, Super Bowl

CBS 1Q loss shrinks as ad recovery boosts revenue

LOS ANGELES — Broadcasting company CBS Corp. said Wednesday that its first-quarter loss shrank by half as its revenue rose on the back of a recovery in advertising and the most-watched Super Bowl in history.

Its net loss in January through March fell to $26.2 million, or 4 cents per share. That’s a smaller loss than the $55.3 million, or 8 cents per share, it posted a year earlier.

Revenue rose 12 percent to $3.53 billion from $3.16 billion.

Excluding restructuring and other charges, the company made $34.3 million, or 5 cents per share. That’s in line with the forecast of analysts polled by Thomson Reuters and reverses a 5-cent adjusted loss it posted a year earlier.

The New York-based company controlled by Sumner Redstone said its overall advertising revenue rose 17 percent to $2.38 billion with gains at local stations, at the CBS network and on its online properties such as TV.com and CNET.

The company declined to give an outlook, as two thirds of its business is still dependent on advertising, which is linked to the uncertain economy.

Its entertainment revenue rose 15 percent to $2.08 billion. The division was helped by a 25 percent jump in advertising revenue at the CBS network, powered by the Super Bowl. At CBS Interactive, its online division, revenue for online billboards known as display ads grew 19 percent.

But operating income in the entertainment unit fell 4 percent to $145 million. Although the Super Bowl gave CBS a revenue boost, it was also expensive to produce.

In addition, the company said producing such shows as “NCIS: Los Angeles” cost tens of millions of dollars, which it said it will make up later when it sells the shows into syndication.

Analysts had expected the poor showing by the first two movies from fledgling CBS Films to pull down earnings. Those movies were the medical drama “Extraordinary Measures,” which starred Harrison Ford and Brendan Fraser, and Jennifer Lopez’ romantic comedy “The Back-up Plan.”

Chief Executive Leslie Moonves said he looked forward to improvements from the movie division.

“We decided to put our toe in the water before diving in,” he said. “What happens three, four, five years down the road, you never know. But basically I like this model, and I think we can make it work.”

The operating income decline raised questions among analysts about CBS producing its own shows and movies.

“To what degree are incremental investments in film and TV going to be an ongoing headwind for margins?” said Anthony DiClemente, an analyst with Barclays Capital.

Moonves said a new deal to share the $10.8 billion cost of covering the NCAA “March Madness” college basketball tournament with Time Warner Inc.’s Turner networks would help it become profitable.

“Previously we had escalating rights fees that would have been challenging in the next three years. Now we have a deal that will have a positive impact to our results in its very first year and for the life of the contract,” Moonves said.

Revenue at CBS’ cable networks, including the premium channel Showtime, rose 8 percent to $368 million. Showtime added 3 million subscribers to 62.7 million. Operating income grew 21 percent to $101 million.

Local broadcasting revenue, consisting of company-owned TV and radio stations, grew 19 percent to $606 million, boosted by higher political ad spending. Outdoor advertising revenue grew 3 percent to $392.2 million, while publishing revenue from Simon & Schuster fell 6 percent to $151.7 million.

CBS shares fell 48 cents, or 3.1 percent, to $15.10 in after-hours trading Wednesday It had closed down 62 cents, or 3.8 percent, at $15.58 in the regular session, before the release of results.