CBS reports further ad improvements

Posts mixed Q4 financials; TV ad revenue up 8%

NEW YORK -- CBS Corp. said Thursday that advertising trends continued to improve in the fourth quarter and into 2010 as it posted mixed fourth-quarter financials, including an 8% TV advertising gain.

"The good news is, the rising revenue trends are continuing into 2010," said president and CEO Leslie Moonves on Thursday. "Both national and local advertising are improving substantially -- with dramatic gains in scatter and sales pacing for the network and our TV stations in the first quarter," he added. "Local radio stations are pacing well above last year's first quarter, and outdoor has reached last year's levels."

On a conference call, he told analysts that nearly all of CBS' local ad markets are currently performing at or above the year-ago levels.

Scatter ad market prices were up 25% on average in the fourth quarter and are up more than 30% in the current first quarter, Moonves said.

The CEO also told Wall Street that he believes in the potential financial benefits of the new CBS Films business despite its weak debut with "Extraordinary Measures." "We were disappointed," Moonves admitted, but said ad costs were limited as the company made strong use of its media platforms to promote it. He said he is looking forward to future film releases and reporting on the movie unit's progress.

After the market close Thursday, CBS reported fourth-quarter earnings of $58.8 million, down from $136.1 million in the same quarter last year. But excluding impairment charges and tax benefits, adjusted profit increased 23% to $171.1 million.

Revenue declined less than 1% to $3.5 billion in a sign that the company may soon return to revenue growth, which has eluded media giants during the recession.

"Throughout the past year, Leslie and his team did all the right things to position CBS for a vibrant future, and the results we're reporting today speak to our momentum," said Sumner Redstone, executive chairman and controlling shareholder. He added that the latest figures are "a preview of great things to come."

Here are other highlights from Thursday's conference call:
* Management said the recent SuperBowl brought in more revenue than any SuperBowl in company history.

* Moonves highlighted that CBS Corp. recently cut $250 million in annual expenses and will continue to look for cost cutting opportunities.

* The TV stations group is pacing ahead of last year so far in 2010 by high teen percentages, according to Moonves. The firm's top 10 stations are doing even better.

* Radio is finally turning positive in the current quarter with overall CBS Radio group revenue trending up in the mid single digits this year. Stations in the top 10 markets are even up in the low teen percentage range, said Moonves.

* This year's mid-term elections could bring in a record political ad windfall given contested races and a recent Supreme Court decision that overturned limits on the money that can be spend in favor or against candidates.

* Moonves said CBS has been in talks with the NCAA about a potential extension of the March Madness broadcast contract, possibly under reworked terms, but no decision has been reached.