CBS loss is $13.5 bil in third quarter

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Things are not as bad as they may seem amid the credit crunch, but the U.S. economy is inching closer to a recession.

That was the message CBS Corp. CEO Leslie Moonves and chairman and controlling shareholder Sumner Redstone tried to send Thursday during a conference call after a third-quarter financial report that was as weak as expected.

The company reported a $13.48 billion operating loss.

Redstone promised not to sell a single additional share of CBS or Viacom, which he also controls, after recently doing so to address high debt held by his holding company National Amusements. "This was not something NA wanted to do, nor is it something that NA intends to do again," he said, adding that the company is "actively talking with our lenders" about possible new debt structures.

Pressed by analysts about whether he could completely rule out share sales even if there were further declines in stock prices, Redstone declined comment.

Pali Research analyst Richard Greenfield said that Redstone "may not have a choice (to sell more stock) going forward if debt renegotiations do not pan out in time."

CBS posted a 3% third-quarter revenue gain to $3.38 billion on higher syndication revenue, driven by the cable syndication sale of "CSI: NY" and the acquisition of CNET Networks.

However, the company reported an operating loss before depreciation and amortization of $13.48 billion, compared with a year-ago profit of $757.6 million. The loss was driven by a pretax noncash impairment charge of $14.12 billion taken because of current market conditions that have reduced the value of the firm's assets.

Adjusted for the charge and other items, OIBDA would have hit $665.2 million, down from $786.9 million in the year-ago period.

"Our strong year-to-date free cash flow of $1.4 billion enables us to strategically invest in our businesses and is more than sufficient to pay our dividend," Moonves said. (partialdiff)
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