CBS Corp. swung to a profit in the fourth quarter of 2006, helped by better TV and outdoor advertising, but shares dipped amid a broad market selloff.
Marking its first full year as an independent company, CBS turned in a net profit of $335 million in the fourth quarter, up from a net loss of $9.2 billion last year, when results included a $9.4 billion writedown of the value of the company’s radio and outdoor advertising assets.
Revenue was up 2% to $3.9 billion, as growth in television, outdoor advertising and publishing were offset by continued de-clines in radio.
Company increased its dividend 10% to 22¢ — the fourth increase since its split from Viacom one year ago — and an-nounced a plan to buy back $1.5 billion in shares, about 6% of all stock outstanding.
Despite earnings that beat estimates, CBS shares closed down 3.69% to $30.24 on the New York Stock Exchange, part of a daylong downturn in the global markets that afflicted all major media companies.
In a conference call, CEO Leslie Moonves said the company will focus on “blocking and tackling,” or running its core busi-nesses more effectively, while “reshaping our portfolio into better-margin, higher-growth businesses.”
At the split, CBS was tagged as the “slow-growth” side of Viacom, with mature businesses such as a broadcast network, tele-vision and radio stations, publishing and billboard divisions.
But CBS stock has grown faster than Viacom’s, and Moonves is bent on finding new revenue streams and digital distribution methods for content such as “CSI,” “60 Minutes” and “The L Word.”
CBS is hoping to receive payments for its signal from cable and satellite distributors, and recently announced it had negotiated such agreements with nine small cable operators.
CBS earnings beat some Wall Street estimates due to better-than-expected performance at local stations, helped by strong po-litical advertising and the sale of “Star Trek: Voyager” into syndication.
Merrill Lynch analyst Jessica Reif Cohen reiterated a “buy” rating on the stock, saying in a research note that it remains inex-pensive compared with its peers.
Moonves said revenue in 2007 would grow in the low single-digit percentages, with high single-digit increases in earnings.