Why CBS Could Post Decent Q2 Results

CBS will announce its Q2 results on July 28th. We expect the company to benefit from 5% increase in up front ad sales. ^[1] The increase comes as a welcome respite following three years of consecutive decline. Better Q2 ratings for CBS’ flagship show Good Morning America, which became the most watched weekday morning American show, certainly helped. ((Morning Show Ratings: Q2 2016 and Week of June 20, TV Newser, June 30,2016)) Additionally, NCIS and The Big Bang Theory remained the top 2 most watched shows during this quarter with average weekly viewership of 15 million each. ^[2]  The company will continue to benefit from growing retransmission consent and reverse compensation revenue, which it expects to reach $2.5 billion by 2020.

As far as CBS cable networks division is concered, premium network Showtime likely gained as international licensing unlocked more value for the network. In addition, the growth in over-the-top services such as CBS All Access could compensate for the effect of cord cutting. The company plans to launch 3-4 original series per year on CBS All Access which would expand its market and help it command better pricing from advertisers ^[3]

The table below shows our expectation for CBS for 2016. We believe Q2 2016 results will reflect these expectations to a meaningful extent.

Have more questions about 21st Century Fox? See the links below.

• What’s 21st Century Fox’s Fundamental Value Based On Expected 2015 Results?
• By What Percentage Can 21st Century Fox’s Revenue & EBITDA Grow In The Next 3 Years?
• What’s 21st Century Fox’s Revenue & EBITDA Breakdown?
• How Important Are Cable Networks For 21st Century Fox?
• What’s The Revenue & EBITDA Breakdown For 21st Century Fox’s Studio Business?

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for 21st Century Fox 

See More at Trefis | View Interactive Institutional Research (Powered by Trefis) Get Trefis Technology

1. CBS Wraps Upfront Ad Sales With Total Up 5%, Deadline, June 27,2016 [↩]
2. Data Source – TV Series Finale [↩]
3. Leslie Moonves: CBS All Access Plans to Launch 3-4 Original Series Per Year, Variety, March 15,2016 [↩]