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CBS held back by network
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October 29, 1998: 9:27 a.m. ET
Broadcaster reports breakeven 3Q despite weakness at TV network
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NEW YORK (CNNfn) - Overcoming negative cash flow from its television network, CBS Corp. on Thursday reported breakeven results for the third quarter, slightly ahead of Wall Street's expectations.
Excluding all items in the third quarter, CBS actually recorded income from continuing operations of $3 million, or zero cents a share. Analysts had anticipated a 1-cent loss, according to First Call.
CBS took a charge of $68 million in the latest period for its previously disclosed streamlining plans in the television division. Including the item, CBS had losses from continuing operations of $38 million, or 5 cents a share.
After charges of $5 million for the early repayment of debt, net losses in the latest period totaled $43 million, or 6 cents a share.
In the 1997 third quarter, net income (which included $143 million in losses from discontinued operations) totaled $162 million, or 26 cents a share.
Revenue climbed 23 percent to $1.58 billion from $1.28 billion.
Shares of CBS (CBS) closed up 1/4 at 25-3/8 in part due to its announcement late Wednesday that Chairman and Chief Executive Michael Jordan will retire ahead of schedule.
Operations were held down by negative cash flow from the television network, CBS indicated in its statement. It did not detail the TV operation numbers.
But despite its well-publicized problems, CBS said it expects the so-called Tiffany network to contribute to cash flow -- or earnings before interest, taxes, depreciation and amortization (EBITDA) -- in conjunction with ratings improvements in the future.
"The company expects to benefit from the ratings improvement at the CBS television network which, combined with the reduction in its cost structure, will enable the network to become a positive contributor to the company's future cash flows," said Mel Karmazin, president and chief operating officer. As expected, Karmazin will replace Jordan in the top post.
Overall cash flow excluding the one-time charge rose 57 percent to $336 million mainly due to CBS's radio and outdoor businesses, which increased cash flow by 53 percent.
In the television business, cable operations and the profitable CBS-owned station group helped offset weakness at the television network, resulting in a 22-percent gain in segment cash flow.
For the latest nine months, the company reported net losses of $20 million, or 3 cents a share, on revenue of $5 billion. A year earlier, it reported net losses of $312 million, or 55 cents, on revenue of $3.89 billion.
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CBS
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