By Jennifer Saba
NEW YORK (Reuters) - CBS Corp, owner of the
most-watched, U.S. broadcast TV network, said it does not
anticipate a slowdown in advertising sales in the remainder of
the year, despite fears that the economy could falter.
CBS expects a surge in political ads ahead of the November
U.S. mid-term elections, the media company said Tuesday, as
it reported a higher-than-expected profit and revenue for the
"Not only is the second quarter great, but the future looks
bright as well," Chief Executive Leslie Moonves said during a
call with analysts.
Second-quarter revenue rose 11 percent to $3.33 billion,
the second consecutive quarter of growth. Analysts had forecast
revenue at $3.24 billion, according to Thomson Reuters
Home to shows like the situation comedy "The Big Bang
Theory" and police procedural "CSI: Crime Scene Investigation,"
CBS said advertising revenue rose 9 percent to $2.2 billion.
"We knew it was going be a good quarter. It was better than
what we were anticipating," Alan Gould, an analyst with
Evercore Partners, said. Gould has an equal weight rating on
Shares of CBS rose 2.5 percent in after-hours trading. The
stock, along with peers like Walt Disney Co , News Corp
, Viacom Inc and Time Warner Inc , have
treaded water in recent weeks after outperforming the broader
market earlier this year.
Investors are worried about whether the rebound in
advertising can be sustained in 2011.
"The broadcast group seems to be under this terrible cloud
regarding the 2011 outlook. Media stocks just can't seem to get
any traction," said Benchmark Co analyst Edward Atorino. But he
added, "I think the broadcast business is going to be
outstanding for the balance of (this) year."
Local broadcasting revenue rose 17 percent to $678.2
million. Entertainment revenues were up 10 percent at $1.67
CBS had a strong upfront -- the annual spring event when
Madison Avenue buys commercial time for the fall TV season --
and is expecting a surge in political ad dollars as several
contested congressional seats are up for grabs in November.
While advertising is on the upswing, Moonves has been vocal
about reducing the company's exposure to advertising, which
represents about 70 percent of total revenue.
On Monday, CBS announced it had signed a 10-year agreement
with the No.1 U.S. cable company, Comcast Corp, to
carry CBS programming.
CBS expects $200 million to $250 million in retransmission
revenue by 2012 and executives reiterated on the call that the
deal keeps them on track with that forecast.
Executives declined to disclose the financial aspects but
Moonves said the deal is priced for sustained revenue growth.
Moonves also said CBS could streamline some of its small
market TV and radio stations within the next six months.
CBS reported adjusted net income of $175.2 million, or 25
cents a share, compared with adjusted net income of $62.6
million, or 9 cents a share, a year ago. Analysts, on average,
had forecast 21 cents a share.
Shares of CBS gained 2.5 percent in after-hours trade to
$15.39, compared with their close of $15.01 on the New York
(Reporting by Jennifer Saba; editing by Andre Grenon, Leslie