Posted by Jimmy P. on February 19, 2009 at 14:28:25:
There`s been speculation that CBS may be the next major conglomerate to start chopping heads. This earnings report cannot be comforting news for CBS Radio employees?:
CBS slashes dividend as income falls 52%
By Kenneth Li in New York
Published: February 18 2009 21:34 | Last updated: February 18 2009 21:34
CBS cut its annual dividend by 81 per cent to preserve cash as it reported a steep 52 per cent drop in net income for the fourth quarter.
Although the US broadcaster�s recent programmes have led viewer ratings, it reported declines in revenue and profits nearly across the board, excluding its digital business, as advertising revenues fell.
�We are clearly in the midst of one of the most difficult financial environments in history, with very little visibility on how long these economic conditions will continue or if there is worse to come,� said Sumner Redstone, CBS executive chairman.
Les Moonves, chief executive of CBS said: �By taking this step now, we will further strengthen our financial flexibility to meet our debt obligations even in difficult credit markets, and still provide our shareholders with an attractive dividend.�
CBS cut its quarterly dividend to 5 cents from 27 cents per share.
Moody�s, a credit ratings agency, estimated radio and television broadcasters� revenues have fallen at the high-end of its estimates of 15 to 20 per cent, with January rates declining as much as 25 per cent for the worst hit.
The sluggish advertising market has made meeting debt obligations difficult for weaker broadcasters. Young Broadcasting, an owner of 10 television stations affiliated with ABC and CBS networks, filed for bankruptcy protection last week. Tribune, which owns 23 stations as well as newspapers, filed for bankruptcy protection in December.
�The early 2009 pattern heightens the risk that broadcasters will breach bank credit agreement financial covenants as early as Q1 and Q2 of 2009, and some may run out of liquidity earlier than originally expected,� Moody�s said in a research note on Wednesday.
Television revenue at CBS fell 8 per cent to $2.21bn in the fourth quarter from a year ago and operating income before depreciation and amortization (oibda) excluding charges fell 35 per cent. The sluggish advertising environment and the lack of the Super Bowl broadcast this year hurt results.
Radio revenue fell 18 per cent to $366.7m and oibda fell 53 per cent.
Outdoor advertising revenue, once a bright spot at the company, fell 15 per cent from a year ago and profits fell 51 per cent.
CBS� digital revenue rose to $186.3m from $58.6m from the purchase of CNET, but rose only 1 per cent on a comparable basis.
Book publishing revenue rose 1 per cent to $245.1m but profits fell 4 per cent to $28.3m.
Copyright The Financial Times Limited 2009