CBS Q1 Earnings Preview: What To Expect?

CBS Corporation (NYSE:CBS) is scheduled to announce its fiscal first quarter results on Thursday, May 4. The company had a strong fiscal 2016, as its earnings came in ahead of analysts’ expectations in all four quarters of the year. In Q4 2016, the company’s overall revenue declined 2% year-over-year (y-0-y) to $3.5 billion, primarily due to a decline in content licensing and advertising, which more than offset the gains in affiliate fees. In affiliate and subscription fees, CBS surpassed $1 billion in re-transmission and reverse compensation for the first time in 2016. In fact, the company plans to achieve $2.5 billion from these sources by 2020. The company’s adjusted earnings per share grew by 21% y-o-y to $1.11 in the fourth quarter, marking an all-time high. Going forward, CBS expects to carry forward its growth momentum into the first quarter of 2017 as well.

According to MediaPost, overall Nielsen C3 ratings for broadcast TV declined 13% in the first quarter. However, CBS grew 18% in the C3 prime time ratings within the 18-49 age group. ((Television, Cable Viewing Down In Q1, InsideRadio, Apr 22 2017))

In 2017, CBS continues to expect robust network scatter pricing in the first quarter. In content licensing and distribution, the company expects to launch several shows – including NCIS: New Orleans, Scorpion, Madam Secretary – into domestic syndication this year. In terms of affiliate and subscription fees, CBS expects re-transmission and reverse compensation to be up about 25% from last year, as some contracts could be reset in 2017. In addition, the company expects its over-the-top services, which already surpassed 2 million subscribers in 2016, to continue to be a bigger contributor to the company’s results going forward. Reuters’ compiled analyst estimates forecast revenues of $3.27 billion and earnings of 96 cents per share, in Q1 2017.

See our complete analysis for CBS Corporation 

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