CBS posts surprise loss as ad sales plunge

By Paul Thomasch

NEW YORK (Reuters) - CBS Corp reported a surprise quarterly loss and revenue that was well short of expectations as severely depressed advertising sales killed any chance that its hit TV shows would keep it profitable.

Shares of CBS dropped as much as 13 percent in post-market trade after the results, adding to declines this year that have seen the stock underperform rivals Viacom Inc, Time Warner Inc and Walt Disney Co.

Results from those companies have been salvaged by the relative stability of their cable networks, where revenue is generated by both advertising and affiliate fees.

CBS's cable business is limited by comparison, depending largely on pay TV network Showtime.

Instead, CBS focuses on businesses like its broadcast television network, local television stations, and radio and outdoor advertising, all of which have been hard hit as advertisers have cut spending in the weak economy.

The crash in advertising spending was reflected in the company's first quarter loss of $55.3 million, or 8 cents per share. That was down from a profit of $244.3 million, or 36 cents a share, in the period a year earlier.

Revenue fell to $3.16 billion from $3.65 billion, a greater-than-expected drop for the only TV broadcast network to post increases in its prime-time audiences during the latest season. TV revenue fell 12 percent.

Analysts had expected CBS -- home to shows like "The Mentalist" and "60 Minutes" -- to earn 7 cents per share on revenue of $3.27 billion, according to Reuters Estimates.