MAIN NEWS HEADLINES
November 9 – November 16, 2006 Edition
Simon & Schuster
Q3 Sales Gains Offset,
Parent CBS Backs Digital
NEW YORK, NY/11/6/06—Simon & Schuster, the publishing arm of CBS Corporation, November 2 reported a third earnings increase of 2% to $197.4 million from $193.2 million for the period ending September 30, 2006. However, the gain was overshadowed by a $6 million allowance for doubtful accounts, an estimated amount of bad debts subtracted from a balance sheet’s accounts receivable. The bad debt allowance is a one-time charge.
Operating income before depreciation and amortization (OIBDA) dropped 10% to $22.7 million from $25.3 million, and operating income with the bad debt allowance decreased 13% from $20.3 million from $23.3 million as a result of the allowance. Top selling titles in the third quarter of 2006 included State of Denial buy Bob Woodward and Ricochet by Sandra Brown.
Parent company CBS reported a company-wide operating income increase of 4% to $646 million, led by television and outdoor units. Net earnings from continuing operations were up 26% to $324 million. Cash flow was also extremely strong. Third quarter free cash flow was $431.8 million, up 65% from $261.3 million for the same prior-year period.
For the nine months ended September 30, revenues of $10.4 billion increased 1% from the same prior-year period.
Sumner Redstone, executive chairman of CBS Corporation said the company is “right on track.” He added that “We remain committed to escalating shareholder value as we continue to drive our businesses forward. I am encouraged by the strategic vision Leslie (Leslie Moonves, president and CEO of CBS) and his team have put forth to capitalize upon the tremendous opportunities unfolding in the digital age.”
Moonves said CBS will sell 29 radio stations to strategically reduce the number of markets in which CBS operates. The company is also pursuing innovative partnerships with YouTube, Yahoo, and many other key new media concerns.
In a separate announcement November 6, Quincy Smith has been named President of the newly formed division CBS Interactive. Smith, who has advised and taken part in many of the biggest interactive and digital deals in the new media industry, will now oversee the company’s entire interactive strategy and help guide its implementation across CBS Corporation’s varied divisions and online businesses. He will report directly to
report directly to Moonves.
In this role, Smith will work in tandem with each CBS division to formulate new media strategies and partnerships involving all interactive platforms, including Internet, mobile and video gaming. Reporting to Smith will be the wide variety of interactive media company-wide, including its wholly-owned Websites. These include, among others, CBS SportsLine.com, CBSNews.com and CBS.com, as well as innertube, a new website offering original programming as well as the streaming of CBS’s most popular series. In addition, Smith will also work closely with the Company’s financial team to identify new businesses that could complement CBS’s core assets, building the Company’s presence in the fast-growing digital counterpart to its existing programming platforms.
Simon & Schuster CEO Jack Romanos is predicting the publishing unit will end the year with gains in sales and earnings. S&S’s revenues were already up 5% to $554.5 million for the first nine months of the year.