NEW YORK — CBS Inc., citing weaker advertising revenue due to the recession plus the high cost of covering the Gulf War, reported a 73% drop Friday in its first-quarter profit.
The company earned $23.3 million, down from $85.3 million in the 1990 quarter. Sales of $761.8 million were off 11% from last year's $851.3 million.
CBS said it is reviewing ways to cut costs, including possible layoffs.
The company said earnings in this year's period would have been lower if not for a one-time gain related to the 1988 sale of its CBS/Records division to Japan's Sony Corp.
In terms of operating income--that is, earnings before interest income is added and taxes are subtracted--CBS said it lost $54.6 million during the quarter, compared to a profit of $89.1 million in last year's quarter.
"Slack advertising demand and the Persian Gulf conflict combined to depress CBS' operating results in the first quarter of 1991," Chairman Laurence A. Tisch said in a statement. "The recession led to sharp cutbacks in national and local advertising that affected all of CBS' broadcast operations."
Expecting a continuing pinch, CBS said it is undertaking a strategic review aimed at cutting costs.
"During 1991, the company anticipates that overall staffing will decline by approximately 400 positions as the result of retirements, attrition and layoffs," it said.
It said it took a $20-million pretax provision to cover the reorganization.
The company did not specify where the cuts would be made, but senior executives at the news division have held special meetings, reportedly to discuss staff reductions.
CBS News has had several rounds of layoffs in recent years.
The company said that in addition to the general advertising slump that has been occurring for several months, it suffered war-related ad cuts. Some advertisers decided against advertising while the conflict was going on.
At the same time, the war raised news gathering costs significantly and required preemption of regular commercial programming.
Earnings also were hurt by the absence of the Super Bowl, which the network broadcast in 1990, and higher rights fees for the NCAA Basketball Tournament. It said CBS Sports' broadcast of the NCAA Men's 1991 Basketball Championship was profitable.