CBS ANNOUNCES THIRD QUARTER AND FIRST NINE MONTHS RESULTS
NEW YORK, Nov. 1 /PRNewswire/ -- For the third quarter of 1991, CBS Inc. (NYSE: CBS) today reported a loss from continuing operations of $169.1 million, or $11.11 per share, compared with earnings of $43.5 million, or $1.69 per share, a year earlier. This quarterly loss was the result of an after-tax provision of $195.5 million, or $12.83 per share, for future losses relating to coverage of Major League Baseball and the National Football League. The loss from continuing operations for the first nine months of 1991 was $108.1 million, compared with income of $266.8 million in the prior year period. Results for the third quarter and the first nine months were as follows (dollars in millions, except per share amounts):
Third quarter 1991 1990 Percent Change
Income (loss) from
continuing operations $(169.1) $43.5 --
Income (loss) from cont.
operations per share $(11.11) $1.69 --
Net income (loss) $(169.1) $43.5 --
Net income (loss)
per share $(11.11) $1.69 --
Net sales $625.6 $661.9 (5)
First nine months 1991 1990 Percent Change
Income (loss) from
continuing operations $(108.1) $266.8 --
Income (loss) from cont.
operations per share $(6.55) $10.36 --
Net income (loss) $(95.2) $266.8 --
Net income (loss)
per share $(5.78) $10.36 --
Net sales $2,097.6 $2,341.5 (10)
Laurence A. Tisch, chairman and chief executive officer of CBS, commented on the financial results, "After completing an evaluation of its major sports programming commitments, the company wrote down by $322.0 million pre-tax, or $195.5 million post-tax, its contracts to broadcast professional baseball and football games. The reduced value of these contracts reflects the severely depressed condition of the sports television market. Despite a thrilling seven-game World Series that drew huge television audiences, advertiser demand for baseball fell substantially below our expectations. For football, pricing remains essentially flat versus last year, but is significantly below our anticipated level.
"Beyond the temporary effect of the recession," Tisch continued, "sports television has been structurally transformed. Most significantly, the sports market reflects the proliferation of sports programming hours, particularly by cable, and the resulting dramatic expansion of commercial time. In addition, traditional sports advertising dollars have been diverted to less costly forms of product exposure and competing media, including entertainment programming. While broadcasts of major sports events have served to cement CBS's position as the nation's most-watched network, it has become imperative that future sports rights contracts recognize the new economic order and buying practices affecting sports television."
In commenting on the outlook for the fourth quarter of 1991, Tisch remarked, "The recessionary conditions for all mass media advertising including television have been widely reported throughout the past year. Although advertising demand in the fourth quarter has shown signs of a modest pickup in primetime and daytime, the slow and sluggish pace of this recovery is not encouraging. In addition, the current slump in advertising continues to overshadow the impact of the Television Network's striking gains in the primetime ratings race. The CBS Television Network's drive to first-place in the new primetime television season reflects a solid slate of regularly scheduled programming and promises to lift the network's growth rate as advertising demand rebounds."
Third Quarter Operating Results
Net sales for the third quarter of 1991 were $625.6 million, down 5 percent from 1990. The company sustained an operating loss before interest and taxes of $291.2 million for the quarter. This operating loss was caused by a pre-tax write-down of $322.0 million ($195.5 million post-tax) for future losses over the remaining terms of its Major League Baseball and National Football League contracts, which both expire at the end of their respective 1993 seasons. The current $322.0 million pre-tax write-off is in addition to the provision for future baseball losses recorded in the fourth quarter of 1990. Apart from the impact of the sports write-down, the CBS Television Network registered modestly better results, despite a 6 percent sales decline, stemming from decreased overhead and lower program production costs in entertainment and news. The network's unit prices in the third quarter, particularly in primetime and sports, fell as the recession diminished demand for advertising. CBS News incurred lower expenses in 1991 partly due to the absence of coverage related to Iraq's invasion of Kuwait in August 1990. Both the CBS Television Stations and CBS Radio Divisions reported lower revenues and earnings, principally reflecting weak local advertising expenditures.
Net interest income was $10.3 million in the third quarter of 1991, compared with $43.3 million in the third quarter a year ago. Interest income on investments was substantially lower as a result of the cash outlay to fund CBS's $2 billion common stock repurchase that was completed in February 1991. At the end of the third quarter, the company's total cash and marketable securities were approximately $950 million, while total debt was approximately $700 million.
Average shares outstanding for 1991's third quarter were 15.2 million, compared with 25.7 million in the prior year.
CBS INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(Dollars in millions, except per share amounts)
Periods ended Three Months Nine Months
Sept. 30 1991 1990 1991 1990
Actual Actual Actual Actual
Net sales $ 625.6 $ 661.9 $2,097.6 $2,341.5
Operating income (291.2) 17.5 (278.1) 279.7
Interest income on
investments, net 22.1 57.8 122.5 173.1
Interest exp. on debt, net (11.8) (14.5) (35.6) (43.6)
Interest, net 10.3 43.3 86.9 129.5
Income from cont. opers.
before income taxes (280.9) 60.8 (191.2) 409.2
Income taxes 111.8 (17.3) 83.1 (142.4)
Income from cont. opers. (169.1) 43.5 (108.1) 266.8
Discontinued opers., net
of taxes: gain on disposal -- -- 12.9 --
Net income $(169.1) $ 43.5 $ (95.2) $ 266.8
Per share of common stock:
Continuing operations $(11.11) $ 1.69 $ (6.55) $ 10.36
Discontinued operations -- -- .77 --
Net income $(11.11) $ 1.69 $ (5.78) $ 10.36
/CONTACT: Keith Fawcett of CBS, 212-975-6824/
(CBS) CO: CBS Inc. ST: New York IN: ENT SU: ERN GK-SM -- NY016 -- 0118 11/01/91 10:17 EST