Driven by aggressive share repurchase and higher operating income,
CBS Corp. posted better-than-expected first quarter fiscal 2014
earnings. However, the shift of the Super Bowl broadcast marred its
quarterly revenues, which fell short of the Zacks Consensus
Estimate and declined 4.6% year over year. Going ahead, CBS Corp.
hinted at a stronger second half driven by increases in political
spending, rising retransmission fees, and more syndication deals.
But at the same time, the company expects programming costs to rise
in the second half due to new agreement with the NFL along with the
addition of a Thursday night NFL game. Given the pros and cons, we
reiterate our Neutral recommendation on the stock.
Based in New York, CBS Corporation (CBS) owns top media
franchises. The company realigned its reporting structure with
effect from fourth-quarter 2009. The company now reports under two
broad groups Content Group and Local Group.
Content Group Comprises 74% of 2013 Total Revenue:
Entertainment Segment comprises CBS Television Network CBS
Television Studios, CBS Studios International and CBS Television
Distribution CBS Films, the producer and distributor of theatrical
motion pictures and CBS Interactive, which operates one of the
leading online content networks for information and entertainment
and includes leading brands, such as CNET, CBS.com, CBSSports.com,
GameSpot, TV.com, CBSNews.com, ZDNet, Last.fm, and
Cable Networks Segment comprises the premium subscription
program services, Showtime Networks the cable network focused on
college athletics and other sports CBS Sports Network and a venture
between Showtime Networks and Smithsonian Institution, Smithsonian
Publishing Segment comprises Simon & Schuster, which
publishes and distributes consumer books in printed, audio and
digital formats (audio downloads and electronic books) both
domestically and internationally under imprints such as Simon &
Schuster, Pocket Books, Scribner and Free Press.
Local Group Comprises 26% of 2013 Total Revenue:
Local Broadcasting Segment comprises CBS Television Stations
consisting of 30 owned and operated TV stations, and CBS Radio,
consisting of 127 radio stations owned and operated in 28 U.S.
markets as of Feb 14, 2013.
Outdoor Americas through CBS Outdoor in North America and South
America, sells advertising space on different media, including
billboards, transit shelters, buses, rail systems (in-car, station
platforms and terminals), mall kiosks, and stadium signage and in
CBS Corporation on Jan 16, 2013, announced its plan to convert
its CBS Outdoor operations in North America and South America into
a real estate investment trust ("REIT") and divest its Outdoor
businesses in Europe and Asia, which will be reflected as a
discontinued operation in the books as of Dec 31, 2012. The company
launched an IPO in the first quarter of 2014 and also received
favorable ruling from IRS to convert CBS Outdoors in to a REIT.
CBS Corp. was born out of Viacom when the latter split into two
publicly traded companies New Viacom and CBS Corporation on Dec 31,
2005. Each outstanding share of Viacom's common stock was converted
automatically into a right to receive half a share of New Viacom
common stock and one CBS common share. New Viacom retained MTV
Networks (MTV, VH1, Nickelodeon, Nick at Nite, Comedy Central, CMT:
Country Music Television, Spike TV, TV Land and many other networks
around the world), BET, Paramount Pictures, Paramount Home
Entertainment, and Famous Music.
CBS Corporation (CBS): Read the Full Research
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