Stock, outlook up at CBS Corp.
EmptyShares of CBS Corp. hit all-time highs Wednesday, a feat that earned president and CEO Leslie Moonves loud applause at the company's annual shareholder meeting.
And there is more room for growth, he signaled. Moonves said he and chairman and controlling shareholder Sumner Redstone see "substantial upside from here" given their belief in the continued strength of CBS Corp.'s media assets.
CBS management Wednesday also reiterated that they would love to own CNN; they also shot down pleas for a return of talk-show host Don Imus to CBS Radio and a suggestion of a sale of the Simon & Schuster book unit.
Redstone defended himself against a shareholder who suggested that Redstone has a big ego that clouds his decision-making.
"Where did you get the idea I got a strong ego?" Redstone said. "I make it my business not to be intrusive."
He said he doesn't insist on Moonves' consulting him on business decisions, but the CBS CEO, who Redstone called "my friend and my colleague," does so regularly anyway. A "long life of experience in this business" allows him to help Moonves with "some suggestions and some guidance," Redstone said.
Moonves declined comment on News Corp.'s takeover bid for financial news powerhouse Dow Jones & Co., but he and Redstone reiterated past comments that they would love to own another news operation — Time Warner Inc.'s CNN — if it became available.
"CNN would be a lot better off if CBS owned it," Redstone said, suggesting to a shareholder that she should contact Time Warner chairman and CEO Richard Parsons. Moonves also said he'd be "very interested" in CNN. A TW spokesman declined comment Wednesday.
Asked by several shareholders whether CBS Radio could reconsider the recent firing of Imus for a comment that listeners found racially offensive, Moonves acknowledged the radio host's "good work" in the past and called the situation "regrettable" but reiterated that CBS had no choice as the comment was "totally inappropriate."
Despite some tricky shareholder questions, many in attendance Wednesday seemed to enjoy focusing on CBS Corp.'s strong stock momentum, which Moonves highlighted at the start and end of his prepared remarks.
"I'm not ashamed to say it again" that CBS shares hit new highs, Moonves quipped at the end of his presentation at the annual meeting, earning more applause and some laughs.
The stock closed up 1.3% on Wednesday at $33.24 after going as high as $33.33 intraday. Its previous 52-week high was $33.04.
Industry CEOs at similar meetings in recent years have expressed disappointment about their companies' lackluster stock performance, but Moonves lauded a 22% increase in 2006, adding that "2007 is off to a strong start as well."
During the past year, CBS shares are up 32%, or nearly 36% when including dividends, he said.
Since its split from Viacom Inc. into a separate company at the start of 2006, CBS has become "an extraordinary success story," Redstone told shareholders Wednesday. "It is delivering on each of its promises."
Moonves in his speech also touted CBS Corp.'s regular dividend increases and stock buybacks. Since becoming a separate firm, "we have returned nearly $2.2 billion in cash to shareholders," he said.
Moonves also lauded his executives' continued push into digital growth opportunities, saying "technology is actually our friend."
He said that while the media and entertainment business has changed fast and radically during the past year, "we've changed along with it." The CEO added that his team's key goals remain "balancing change while remaining on top with our established (assets)" plus maximizing shareholder value.
Asked about a possible sale of Simon & Schuster, Moonves said that was "absolutely not" on the agenda.
He and Redstone faced criticism at the meeting over the book unit's "Palestine: Peace Not Apartheid" by President Jimmy Carter, who has admitted to factual errors that he promised to correct in a second edition. The two CBS officials answered shareholder calls for a commitment to immediate corrections, arguing that book publishers generally have no big staff for fact checking and the like, with Moonves adding that the book simply reflects Carter's point of view.
Redstone said the company's policy is to not have management tell Simon & Schuster what or what not to publish.