CBS Corporation (CBS): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


For the second quarter of 2014, CBS Corp. posted better-than-expected earnings which increased 4% year-over-year, driven by aggressive share repurchase activity. Going ahead, the company expects a stronger second half based on higher political spending, rising retransmission fees, and more syndication deals. However, the shift of the NCAA Division Basketball matches marred its quarterly revenues, which fell short of the Zacks Consensus Estimate and declined 5.4% year over year. Also, lower advertising revenues added to the woes. Moreover, 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 embedded in the stock, we reiterate our Neutral recommendation.


Based in New York, CBS Corporation (CBS) owns the top media franchises. The company now reports under four broad segments following the separation of its Outdoor Unit.

Entertainment Segment comprises CBS Television Network CBS Television Studios, CBS Global distribution Group and 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,,, GameSpot,,, ZDNet,, 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 Networks.

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 Broadcasting Segment comprises CBS Television Stations consisting of 30 owned and operated TV stations, and CBS Radio, consisting of 126 radio stations owned and operated in 27 U.S. markets as of Feb 11, 2014.

On Jan 16, 2013, CBS Corporation 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 has been reflected as a discontinued operation in the books as of Dec 31, 2012. The company launched an IPO in the first quarter of 2014. Subsequently, CBS divested 81% of its stake in the unit in Jul 2014, thereby completing the split-off.

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.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: CBS

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