For the third quarter ended Sept. 30, income from continuing operations rose to $35 million, or 5 cents a diluted share, from a loss of $38 million, or 5 cents a share, a year earlier. Revenue rose to $1.7 billion from $1.58 billion a year ago. Cash flow from continuing operations, without special items, rose 21%, to $406 million from $336 million.
Christopher Ensley, media analyst at
, noted CBS' strong results in the radio and outdoor-advertising segments. "They beat my numbers," the analyst said, citing numbers for
, which operates 163 radio stations, and
, Infinity's outdoor business. Same-station revenue rose 16%, while the outdoor group enjoyed growth of 17%. "We all expected radio to be strong, but for them to put up that kind of growth in outdoor is phenomenal," Ensley said. "I've got to believe it has something to do with the cross-selling and cross-promotion between the two segments."
CBS shares were up 1 7/16 to 46 5/8.
Ensley said the outdoor business should only get stronger, since Infinity next month is scheduled to close its acquisition of
, one of the largest outdoor advertising companies in North America.
, which comprises the CBS Television Network and 16 CBS-owned television stations, was also sound. Quarterly revenue rose 4.7% to $955 million from $912 million a year earlier. Cash flow, defined as earnings before interest, taxes, depreciation, amortization, minority interests and equity losses, jumped to $121 million from $51 million in the same period last year. "TV's really good, though it's not driving the boat," added Ensley. "But they've turned that operation around. It's more profitable, mostly from improvements on the network side where they're cutting out a lot of fat."
Challenges ahead for CBS include the integration of its many planned acquisitions, including Outdoor Systems,
King World Productions
and the big media combination with
. "I don't expect any disruptions in the process, since they usually have no problem integrating new operations," Ensley said.
Ensley had a strong buy on CBS stock before Viacom in September set its merger with CBS, but he has no rating while that deal is pending. Lazard Freres participated in the underwriting of Infinity's initial public offering in December 1998.