On May 30, 2014, we issued an updated research report on
) following the company's first quarter fiscal 2014 results.
CBS Corp's quarterly earnings per share of 78 cents grew 7% year
over year and was ahead of the Zacks Consensus Estimate. However,
the shift of Super Bowl broadcast to
Twenty-First Century Fox, Inc.
) marred its quarterly revenues of $3,856.0 million, which fell
short of the Zacks Consensus Estimate and declined 4.6% year over
CBS Corp. hinted at a robust fiscal 2014. The company expects a
good run in advertising in the second half of the year as political
spending increases. Additionally, the telecast of Thursday Night
National Football League (NFL) for 8 weeks will add to its
advertising revenues. Moreover, the company's growth momentum will
get a boost from the increasing reverse compensation from
affiliates, strong demand of its content, digital distribution,
more syndication deals and retransmission consent revenues.
The company anticipates CBS Television Network to be a major growth
driver. CBS Corp. expects retransmission fees to hit the $2 billion
mark in 2020.
CBS Corp. continues to benefit from its content monetization as
well as streaming deals. After successfully licensing
, the company expects to put more of its programming on these
platforms in 2014, which will boost its studio bottom-line results.
Apart from this, the company has announced that it will return $6
billion to its shareholders in fiscal 2014.
However, CBS Corp. faces rise in programming costs in the second
half due to a new agreement with the NFL along with the addition of
the Thursday night NFL. Also, unfavorable currency fluctuations and
competition from other stalwarts like
Time Warner Inc.
) pose concerns.
CBS Corp. currently carries a Zacks Rank #3 (Hold).
Key Picks from the Sector
A better-ranked media stock worth investment is
The Walt Disney Company
), which carries a Zacks Rank #2 (Buy).
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