We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
CBS to Report Q1 Earnings: Advertising Growth Holds the Key
Read MoreHide Full Article
CBS Corporation is slated to report first-quarter 2018 results on May 3.
The company’s earnings of $1.15 per share beat the Zacks Consensus Estimate by a penny in the last reported quarter. It has beaten the consensus mark in the trailing four quarters, delivering an average positive surprise of 5.33%.
CBS has also surpassed the consensus mark for revenues in three of the trailing four quarters. Revenues increased 11% year over year to $3.92 billion.
The Zacks Consensus Estimate for first-quarter earnings and revenues is currently pegged at $1.19 and $3.63 billion, respectively.
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Notably, shares of CBS have lost 15.3% year to date, significantly underperforming industry’s 17.7% rally.
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 (NFLX - Free Report) .
However, we believe the company is likely to gain from increasing demand for content, rise in retransmission rates, expansion of direct-to-consumer business, sturdy digital presence, upfront fees from traditional distribution partners and higher international content licensing fees.
CBS’ sustained focus on increasing subscription-based revenues is 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 fees growth in the to-be-reported quarter.
Moreover, CBSN — the company’s direct-to-consumer digital news network — has been gaining rapid traction among the 18-49 age groups, which bodes well for the company. Notably, in 2017, streaming of the network increased to 287 million, up 17% year over year.
CBS expanding relationships with the likes of Netflix and Apple (AAPL - Free Report) is also positive. The company is creating series of three shows for Netflix including two new ones called Unbelievable and Insatiable and the second season of American Vandal. Apple has also renewed second season of Carpool Karaoke. Expansion of premium content is expected to boost top-line growth.
Moreover, a lower tax rate bodes well for CBS. The company’s plan to use the savings to invest on growth initiatives like expanding All Access and CBSN internationally along with late February launch CBS SPORTS HQ are positive for investors.
CBS SPORTS HQ is a 24-hour streaming sports news network, available for free on CBSSports.com and connected TV devices such as Amazon Fire TV, Apple TV and Roku players.
What Does the Zacks Model Unveil?
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 an Earnings ESP is -0.03%. Consequently, our proven model does not conclusively show that the company is likely to deliver a positive surprise this quarter.
Stock With a Favorable Combination
Here is a stock which as per our model has the right combination of elements to post an earnings beat this quarter:
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
CBS to Report Q1 Earnings: Advertising Growth Holds the Key
CBS Corporation is slated to report first-quarter 2018 results on May 3.
The company’s earnings of $1.15 per share beat the Zacks Consensus Estimate by a penny in the last reported quarter. It has beaten the consensus mark in the trailing four quarters, delivering an average positive surprise of 5.33%.
CBS has also surpassed the consensus mark for revenues in three of the trailing four quarters. Revenues increased 11% year over year to $3.92 billion.
The Zacks Consensus Estimate for first-quarter earnings and revenues is currently pegged at $1.19 and $3.63 billion, respectively.
CBS Corporation Price and EPS Surprise
CBS Corporation Price and EPS Surprise | CBS Corporation Quote
Let’s see how things are shaping up prior to this announcement.
Factors to Consider
Notably, shares of CBS have lost 15.3% year to date, significantly underperforming industry’s 17.7% rally.
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 (NFLX - Free Report) .
However, we believe the company is likely to gain from increasing demand for content, rise in retransmission rates, expansion of direct-to-consumer business, sturdy digital presence, upfront fees from traditional distribution partners and higher international content licensing fees.
CBS’ sustained focus on increasing subscription-based revenues is 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 fees growth in the to-be-reported quarter.
Moreover, CBSN — the company’s direct-to-consumer digital news network — has been gaining rapid traction among the 18-49 age groups, which bodes well for the company. Notably, in 2017, streaming of the network increased to 287 million, up 17% year over year.
CBS expanding relationships with the likes of Netflix and Apple (AAPL - Free Report) is also positive. The company is creating series of three shows for Netflix including two new ones called Unbelievable and Insatiable and the second season of American Vandal. Apple has also renewed second season of Carpool Karaoke. Expansion of premium content is expected to boost top-line growth.
Moreover, a lower tax rate bodes well for CBS. The company’s plan to use the savings to invest on growth initiatives like expanding All Access and CBSN internationally along with late February launch CBS SPORTS HQ are positive for investors.
CBS SPORTS HQ is a 24-hour streaming sports news network, available for free on CBSSports.com and connected TV devices such as Amazon Fire TV, Apple TV and Roku players.
What Does the Zacks Model Unveil?
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 an Earnings ESP is -0.03%. Consequently, our proven model does not conclusively show that the company is likely to deliver a positive surprise this quarter.
Stock With a Favorable Combination
Here is a stock which as per our model has the right combination of elements to post an earnings beat this quarter:
Fortinet (FTNT - Free Report) has an Earnings ESP of +2.70% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>