Thursday, February 10, 2011

CBS Corp. (NYSE: CBS): Q4 Earnings Preview 2010

CBS Corp. (NYSE: CBS), owner of the most-watched U.S. broadcast network, is scheduled to release its fourth-quarter earnings after the closing bell on Wednesday, February 16, 2011. Analysts, on average, expect the company to report earnings of 44 cents per share on revenue of $3.85 billion. In the year ago period, the company reported earnings of 25 cents per share on revenue of $3.50 billion.

CBS Corporation operates as a mass media company in the United States and internationally. The Entertainment segment consists of the CBS Television Network, CBS Television Studios, CBS Studios International, CBS Television Distribution, CBS Films and CBS Interactive.

In the preceding third-quarter, the New York, NY United States-based company's net income was $317.3 million, or 46 cents a share, compared to $207.6 million, or 30 cents a share, in the year-ago period. On an adjusted basis, the company earned 35 cents a share in the third quarter. Revenue decreased to $3.3 billion from $3.35 billion. Analysts, on average, expected the company to report earnings of 31 cents a share on revenue of $3.35 billion.

Aty its last earnings call in November, the company said that strong pacing is continuing into the fourth quarter. CBS said that political advertising will contribute significantly to its fourth quarter results.

For 2011, management provided a laundry list of positives including the strong network upfront and still strengthening scatter, lower programming costs in primetime and for sports, higher retransmission revenues, better Outdoor contracts, expense savings from 2010 restructuring actions, and lower interest expense.

CBS also announced that its board has approved a $1.5 billion share repurchase program. The company intends to use the program to repurchase CBS Corp. Class B common stock, beginning in January 2011.

CBS Corp Chief Executive Leslie Moonves is optimistic about 2011 advertising trends and expects the brisk pacing of ad revenue growth to continue in the first quarter. Moonves said that CBS is anticipated to have an "extremely strong" upfront market this spring, the annual period when advertisers book the bulk of commercial time for the year.

The company has benefited from improving trends in advertising due to renewed strength in the auto and financial services sectors. The company stated in its recent earnings call that it has benefited from improved upfront advertising and scatter pricing in 2010. Upfront advertising is when advertisers buy their advertising time at the start of a season or a set advertising sales period. Scatter pricing is when advertisers buy time during a season or based on specific targets or events.

Among other developments, the U.S. Tennis Association and CBS signed a 3-year agreement that will keep the U.S. Open on the network through 2014. The U.S. Open has aired on CBS every year since 1968. The network’s current deal with the USTA ends after the 2011 tournament.

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