What To Expect From CBS’ Q2 Earnings

CBS Corporation (NYSE:CBS) is scheduled to announce its second quarter results on Monday, August 7. The company reported better-than-expected fiscal first quarter results, as its earnings and revenue came in ahead of analysts’ expectations. However, the company’s revenue declined 7% year-over-year (y-o-y) to $3.3 billion, primarily due to a decline in advertising, which more than offset the gains in content licensing and affiliate fees. The company also posted adjusted earnings of $1.04, up 9% y-o-y.  Going forward, we expect the company to carry forward its earnings growth momentum into the second quarter as well.

According to MediaPost, overall Nielsen C3 ratings for broadcast TV declined 12% in the June quarter. Moreover, CBS fell 10% in the C3 prime time ratings within the 18-49 age group. This decline in viewership could further hurt the company’s advertising revenues, which could, in turn, impact the company’s top line in this quarter.

In Q2 2017, CBS expects the Local Media revenue to pace up to mid-single digits for the second quarter. Reuters’ compiled analyst estimates forecast revenues of $3 billion and earnings of 98 cents per share in Q2 2017.

CBS expects to grow its re-transmission and reverse compensation revenue by approximately 25% in 2017.  The company also expects healthy growth in OTT subscribers on the recently launched Twin Peaks on Showtime and soon-to-be-launched Star Trek: Discovery, and the first full season of the NFL on CBS All Access. However, in the second half of 2017, the advertising revenue compared with the prior year is expected to be negatively affected by the benefit in 2016 from strong political advertising.

See our complete analysis for CBS Corporation 

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