Will CBS Corp. (CBS) Miss Q2 Earnings on Lower Ad Revenues? - Analyst Blog

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Media giant, CBS Corporation ( CBS ), is set to report its second-quarter 2014 results on Aug 7, 2014. Last quarter, it posted a positive earnings surprise of 4%.  Let us see how things are developing for this announcement.

Growth Factors This Quarter

Television advertising revenues have been displaying soft trends in the quarter as premier sporting events on other networks like ABC were no match for repeats on CBS network. It is expected that advertising revenues will pick up in the second half as political advertising spending increases. Also, an addition of Thursday Night National Football League (NFL) game for eight weeks will add to advertising revenue.


Earnings Whispers

Our proven model does not conclusively project CBS Corp as likely to beat earnings this quarter. This is because a stock needs to have both a positive  Earnings ESP and Zacks Rank #1 #2 or #3 for this to happen. This is not the case here as you will see below.

Zacks ESP:   CBS Corp currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 72 cents per share.

Zacks Rank: CBS Corp's Zacks Rank #3 (Hold) increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise. We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into an earnings announcement, especially when the company is witnessing negative estimate revisions.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows these to have the right combination of elements to post an earnings beat:  

The Andersons, Inc. ( ANDE ) with an Earnings ESP of +6.09% holds a Zacks Rank #1 (Strong Buy).

Liberty Media Corp. ( LMCA ) has an Earnings ESP of +7.04% and a Zacks Rank #3.

Macy's, Inc. ( M ) has an Earnings ESP of +1.16% and a Zacks Rank #3.


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CBS CORP (CBS): Free Stock Analysis Report

LIBERTY MEDIA-A (LMCA): Free Stock Analysis Report

MACYS INC (M): Free Stock Analysis Report

ANDERSONS INC (ANDE): Free Stock Analysis Report

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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 , Business , Earnings , Stocks

Referenced Stocks: CBS , LMCA , M , ANDE

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