Can CBS Beat The Street Again With Q3 Results?


CBS Corp. could be reporting its final Q3 earnings on Thursday afternoon, after market close.

Investors are wondering if the company can continue its earnings momentum, and Zacks Investment Research notes the company has beaten Zacks consensus estimate for the last four quarters — with an average earnings beat of 6.6%.

To see if CBS can keep it up, Zacks took a look at how things are shaping up ahead of the Nov. 3 earnings release.

Its assessment: Beating the street is not a guarantee for CBS this quarter.

“Our proven model does not conclusively show that CBS is likely to beat earnings estimates this quarter,” Zacks says.

This is because a stock needs to have both a positive earnings ESP (Expected Surprise Prediction) — a potent tool that investors can use to select better stocks for their portfolios — and a Zacks rank of “Strong Buy,” “Buy,” or “Hold” for this to happen.

CBS has an Earnings ESP of 0.00% as both the most accurate estimate, and the Zacks Consensus Estimate stands at 98 cents, Zacks says. With a “Hold” rating placed on CBS, this makes surprise prediction difficult.

“CBS Corp.’s sustained focus on increasing subscription-based revenues and increased political spending should drive the top line in the quarter to be reported,” Zacks says. “Earlier, the company had also said that it anticipates increased political advertising in the latter half of the year, which in turn will favorably impact its performance. Further, it has said that TV stations are pacing to be up high-single digits, buoyed by political advertising. Additionally, radio is also expected to do well in Q3 2016, backed by an increase in political spending.”

However, the media industry is highly competitive, Zacks notes. Thus, CBS faces “intense competition from other broadcast radio and television stations, cable television networks and motion picture studios in the market in which it operates,” Zacks says. “This may weigh on the company’s performance.”