CBS Corp reported profit of $15.4 million in the second quarter, down from $408 million in the year-ago period. CBS had a difficult comparison against the previous year's quarter which included a $127.2 million gain on the sale of the Sundance Channel. The company also said revenue was $3 billion, slightly down from $3.4 billion. Operating income dropped from $637 million to $242 million for the period.
Television revenue fell 10% to $1.95 billion, from $2.16 billion. Ad sales were down 13% mostly on weakness at the local station level. Though affiliate revenue rose 10% because of rate increases and subscriptions growth at Showtime Networks. The company also wrote down the value of its programming including a $14 million charge for the period. The company also took a $4 million restructuring charge. The company recorded ad sales of $1.1 billion in the three months to June 30, down from $1.3 billion.
In a statement CBS president and CEO Leslie Moonves said: "We continue to believe the back half of the year will be considerably stronger than the first...As the economy improves, we are confident we can deliver stronger financial results in both near and long term."Moonves said on the call that local markets are seeing a pick-up. "Local businesses were the first to be hit, and it appears they are first to come out of it as well." He said each quarter this year has seen an upward swing in the TV unit.
Commenting on the upfront, Moonves added: "We achieved flat revenue, total revenue is down and we retained more inventory to sell in scatter." Moonves said the network would do well in the scatter market and referred to 2002 when the network gambled on a better year round market and won. He said CBS was already seeing a strong upswing in the third quarter with scatter up 30% over the previous year period. That's worth another $30 million for the network, Moonves said, adding that they had to cut reality shows to incorporate additional ads. "The worst is behind us," he said adding that government programs such as 'Cash for Clunkers,' and healthcare initiatives would come first to broadcast to spread the message.