CBS Earnings Fall, But Operating Income Jumps Higher

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CBS Corp.'s (CBS) third-quarter net income fell sharply from a year ago when it was still combined with Viacom Inc., but earnings from its continually owned businesses jumped 26 percent, the media company reported Thursday.

Stronger results in television, outdoor advertising and lower interest expenses due to falling debt levels propelled the earnings from continuing operations higher, offsetting weakness in radio.

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On a reported basis, CBS earned $316.9 million or 41 cents per share, in the three months ended Sept. 30 versus $708.5 million, or 90 cents a share, a year ago when it was still reporting as a combined company.

Earnings from continuing operations — accounting for the split from Viacom (VIA) and also the sale of its Paramount Parks business — rose to $323.6 million, or 42 cents a share, from $256.9 million, or 33 cents per share, a year ago.

Analysts polled by Thomson Financial had been expecting earnings of 40 cents per share.

Revenues edged higher to $3.38 billion from $3.37 billion. Analysts polled by Thomson Financial had been expecting $3.43 billion.

Earnings from television, which includes CBS, a group of TV stations, a syndication business and other assets, grew 9 percent on lower programming expenses, though revenues were essentially flat, held back by a 3 percent decline in advertising revenues.

CBS shut down its unprofitable UPN network this year and now co-owns The CW network with Time Warner Inc.'s (TWX) Warner Bros. Entertainment unit.

Outdoor advertising revenues rose 9 percent, though 2 percentage points of that gain was due to currency fluctuations. Earnings rose 20 percent.

Radio remained a weak spot for CBS, with earnings falling 10 percent on a 6 percent decline in revenues. CBS attributed the revenue decline to programming changes at 27 of its stations as well as overall weakness in the radio advertising market.

In May CBS said it would sell stations in 10 of its smaller markets, and to date the company has sold 29 stations in 8 of those markets for $570 million.

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