Q2 reports by broadcasting companies will be in full swing next week, with 13 radio and TV companies (mostly pure-play) on the RBR/TVBR calendar. At Wells Fargo Securities, analyst Marci Ryvicker is expecting that cost-cutting will pay off and most companies will report in line with expectations – although those expectations aren’t particularly high.
“Based on Q2 results reported by various traditional media companies thus far, we expect most pure-play broadcasters to report revenue declines similar to Q1 (which ranged from -14% to -21%) and cost cuts to be substantial, resulting in potential beats to the bottom line. We do not expect much commentary on the second half of the year and anticipate the tone of the conference calls to be cautious. Most companies will focus on plans to de-lever, pricing trends, cost cutting initiatives, retrans agreements (TV), and auto category performance,” Ryvicker said in an earnings preview.
The biggest broadcasting pure play is, of course, CBS Corporation. “Given that Street estimates for CBS have continued to come down over the past month or so, we do not anticipate another significant miss, like what we saw in Q1. Nor do we anticipate a revision to management’s full year OIBDA guidance of $1.725-$1.925B (we remain at $1.742B). Our Q2 estimates are as follows: rev. of $3.052B (-13%) vs. consensus of $3.055 (-13%), EBITDA/OIBDA of $369M (-53%) vs. consensus of $391M (-50%) and EPS of $0.06 vs. consensus of $0.08. CBS reports August 6th at 4:30pm ET. We will be looking for commentary on the upfront, which should have wrapped up by then, as well as commentary from CBS’ new CFO, Joe Ianello,” Ryvicker told clients.