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EARNINGS

CBS After-Tax Profit Up in Quarter, Off for Year

February 12, 1986

CBS Inc.'s after-tax income rose 53% in the fourth quarter of 1985 from the year before but dropped 87% for all of last year, the company announced Tuesday.

Several private analysts said CBS has emerged from a rough year in better financial shape.

The company's strength was sapped last year by fending off a hostile $5.41-billion bid from Atlanta broadcaster Ted Turner. CBS' defensive strategy included buying back 21% of its stock for more than $1 billion.

Since it won the takeover battle, CBS has been selling assets to retire debt. The company also has been streamlining operations to focus on three core businesses.

In the fourth quarter, CBS had after-tax earnings of $55.4 million on revenue of $1.35 billion. Net earnings came to $36.1 million on revenue of $1.33 billion in the final three months of 1984.

After-tax profit declined to $27.4 million in 1985 and revenue totaled $4.76 billion, compared to net income of $212.4 million and revenue of $4.64 billion in 1984.

Much of the decline in 1985 net profit was due to the discontinuance in the third quarter of CBS' toy, theatrical film and home-computer software businesses, the company said.

Thomas H. Wyman, CBS chairman and chief executive, said the steps taken last year had strengthened CBS.

"We feel that, with 1985 behind us, CBS is in an excellent competitive position to capitalize on an improving economy," Wyman said.

After fighting off Turner's bid, CBS moved to shield itself from other unwanted suitors by installing Loews Corp. Chairman Laurence A. Tisch on its board. Tisch said in October that he intended to more than double his company's stake in CBS to 25%. So far Loews has bought about 12.2% of CBS' 23.44 million shares outstanding.

Tisch will provide CBS with constructive advice, which should help the company's broadcast division cope with competition from cable television and independent programmers, said Kenneth Berents, with Legg Mason Wood Walker in Baltimore.

Berents said CBS has the potential to earn $10 a share, based on annual income from continuing operations.

Last year, CBS earned $202.6 million from continuing operations, down from $298.4 million, or $10.04 a share, in 1984. On that basis, CBS' earnings fell 50% in the fourth quarter to $55.4 million from $110.5 million in the final 1984 quarter.

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