Analyst raises CBS revenue expectations


With quarterly earnings reports heating up, Wells Fargo Securities analyst Marci Ryvicker is expecting improved reports from most broadcasting companies, but cautions that such expectations are already built into the stock prices. She is out with news estimates for CBS Corporation which boost revenue forecasts.

CBS recently changed how it reports segment revenues, creating a new Local Media segment which will report CBS Radio, CBS Outdoor and the O&O TV station group separately from the network and cable businesses.

“We updated our CBS model to coincide with management’s format change and took this opportunity to dust off our estimates. We raised our revenue and EBITDA assumptions for ’09 and ’10 but EPS did not move materially due to below-the-line items,” Ryvicker said in a research note. “We expect another positive conf call and will look to new CFO Joe Ianello to help set expectations for 2010, which seem to be high (and rightly so, in our opinion). BOTTOM LINE: High expectations will be tough to beat, although this is already priced in,” she said.

The analyst is now looking for total revenue at CBS Corp. to be down 1% in Q4. She’s expecting gains of 1% for the network business, 5% for TV production/distribution and 5% for the cable networks, but with Interactive down 3%, for total growth of 2% for the “Content Group.” That leaves the “Local Group” to account for the decline. Ryvicker expects CBS Outdoor to be down the most, 11%, with CBS Radio off 7% and the O&O TV group flat.