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Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

CBS's Core Broadcast Revenue Slips

  • Summary: CBS' drop in second quarter revenue added to Wall Street's concern about the future of the legacy broadcast business. Even though CBS has the strongest prime-time TV lineup of the major networks, TV revenue dropped to $2.3 billion, a 1.1% decline. Advertising revenue was flat for the second consecutive quarter, and the $24mm costs of closing the UPN network resulted in operating income dropping by 3%, to $491.9mm. Stung by the loss of Howard Stern to Sirius (NASDAQ:SIRI), CBS radio's ad revenue fell by 8%, to $519.1mm. Radio's operating income came in 20% lower, at $219.6mm.
  • Comment on related stocks/ETFs: Last month, Rob Black noted that advertisers are considering moving more of their dollars to the internet as digital video recorders (which allow users to skip commercials) become more popular. Resources: press release, conference call transcript, and Bloomberg's write-up of the earnings results.
Source: CBS' Legacy Is Waning