CBS Corporation CBS is slated to report second-quarter 2018 results on Aug 2.
In the last reported quarter, the company’s earnings of $1.34 per share beat the Zacks Consensus Estimate by 15 cents and jumped 28.8% year over year. It beat the consensus mark in the trailing four quarters, delivering an average positive surprise of 6.11%.
Revenues increased 12.5% from the year-ago quarter to $3.76 billion and comfortably surpassed the consensus mark of $3.63 billion.
The Zacks Consensus Estimate for second-quarter earnings and revenues is currently pegged at $1.11 and $3.46 billion, respectively.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
CBS is expected to benefit from strong demand for content, rise in retransmission rates and expansion of direct-to-consumer business.
CBS’ sustained focus on increasing subscription-based revenues is a positive. CBS All Access and Showtime OTT continue to gain subscribers steadily, which is likely to boost affiliate and subscription fees.
The company’s deals with Hulu, YouTube TV, DirecTV Now, and Sony PlayStation Vue are also anticipated to bolster affiliate and subscription fee growth in the to-be-reported quarter. The company’s expanding relationships with the likes of Netflix NFLX and Apple AAPL bode well. Expansion of premium content is expected to boost top-line growth.
However, the company remains highly vulnerable to the advertising market as it derives a major portion of revenues (42% of 2017 total revenues) from the sale of advertising on its broadcast and cable networks and television, syndicated programming as well as online properties. Additionally, broadcast TV is losing ground to streaming services providers like Netflix, which remains a concern.
Moreover, the media industry is highly competitive and CBS faces intense competition from broadcast radio and television stations; cable television networks and motion picture studios in the market in which it operates. This may weigh on the company’s top line.
CBS Corporation Price and EPS Surprise
CBS Corporation Price and EPS Surprise | CBS Corporation Quote
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
CBS has a Zacks Rank #3 and its Earnings ESP is -0.37%. Therefore, our proven model does not conclusively show that the company is likely to deliver a positive surprise this quarter.
A Stock to Consider
Here is a company that you may want to consider as our model shows that it has the right combination of elements to post an earnings beat:
Vishay Intertechnology VSH has an Earnings ESP of +2.41% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
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