CBS Sees Results Improving In 2nd Half Of 2009
May 07 2009 - 5:53PM
Dow Jones News
Les Moonves, chief executive of CBS Corp. (CBS), joined the
chorus of media executives sounding a note of optimism about signs
of improvement in advertising markets, which have been decimated by
the recession.
Despite recording a first-quarter loss that disappointed
investors, Moonves on Thursday said on a conference call with
analysts following the release that the company's performance is
poised to improve in the second half of 2009.
"Indications are we've seen the bottom of this downturn," said
Moonves. "It's still premature to call it a full recovery, but the
trends are encouraging, particularly in for the back-half of the
year. We believe the balance of 2009 will be better than these
results."
Specifically, Moonves said the volume of deals in the so-called
scatter market for advertising has increased "dramatically" in
recent weeks and prices are higher as well. The scatter market
refers to ads sold during the television season as opposed to
before it.
As for ad cancellations for the third quarter, Moonves said it's
too early to tell what will happen.
CBS Chief Financial Officer Fred Reynolds said spending from
automotive advertisers is higher now than it was last year at this
time.
Similar comments were made over the past week by top executives
at other major media conglomerates such as News Corp. (NWSA), Walt
Disney Co. (DIS) and Viacom Inc. (VIA). But Moonves noted that CBS
is backing up its optimism with a full-year earnings guidance that,
if achieved, would mark a dramatic improvement in the company's
performance. The company forecast operating income before
depreciations and amortization in a range from $1.725 billion to
$1.925 billion for the year.
Moonves said he was confident in the forecast due in part to
easier comparisons in the second half of the year as well as cost
cuts the company has made that will begin to help its financial
performance, particularly in the fourth quarter.
CBS Chairman and controlling shareholder Sumner Redstone also
said he sees "clear signs" that the economic situation is starting
to improve and he has full confidence that a recovery will
begin.
"Network television is still the best game in town, particularly
for big brands coming out of a down cycle," said Moonves.
-By Nat Worden, Dow Jones Newswires; 201-938-5216;
nat.worden@dowjones.com