Analyst: CBS Expected to Hit Q3 Estimates

NEW YORK: Wells Fargo analysts say CBS is likely to hit its third-quarter estimates, with an upside for next year.

“Given various positive comments made by management coupled with a healthier-than-expected scatter market, we anticipate CBS to at least meet--and potentially exceed--Q3 expectations of 22 cents,” Wells Fargo’s Marci Ryvicker said, noting both her firm’s and consensus for earnings per share. “Full year OIBDA [operating income before depreciation and amortization] guidance should remain intact, at $1.725 billion to $1.925 billion--we are currently forecasting $1.753 billion while consensus is at $1.768 billion. Bottom line: We expect another positive conference call, which is likely to boost the stock and move street numbers up for 2010.”

CBS (NYSE: CBS.A, CBS) will report third-quarter results Nov. 5th at 4:30 p.m. Eastern. The media company reaffirmed its own outlook on full-year 2009 results earlier this month for OIBDA of between $1.725 billion to $1.925 billion.

Across broadcast, Ryvicker said another round of cost-cutting was expected.

“Based on Q3 results and various pre-announcements reported by some traditional media companies thus far, we expect most pure-play broadcasters to report revenue declines similar to or slightly better than Q2, which ranged from -20 to -15 percent,” she said. “Cost cuts are also likely to be substantial, resulting in potential beats to the bottom line. We expect the overall tone of the conference calls to be cautiously optimistic, with specific focus on plans to de-lever, pricing, further cost cutting, retrans, auto, political and the potential for radio royalties.”

More on CBS:
October 14, 2009: “CBS Reaffirms 2009 Outlook
CBS reaffirmed its outlook on full-year results for 2009, just as Sumner Redstone said he would sell shares of the media company.
October 12, 2009: “CBS Scores Retrans With Cablevision
On average, CBS (NYSE: CBS.A) has been getting about 50 cents per subscriber a month.

October 1, 2009: Moody’s Goes Stable on Broadcasting
Moody’s Investors Service changed its outlook on the U.S. TV broadcast industry from “negative” to “stable.”

September 16, 2009: Analyst Upgrades CBS
“... we still see [approximately] 30 percent potential upside to the current price.”

July 28, 2009: CBS Expected to Meet the Street
“Given that Street estimates for CBS have continued to come down over the past month or so, we do not anticipate another significant miss...”

July 1, 2009:Deutshe Bank Cuts CBS Forecast
The investment bank scaled back its outlook because of skepticism about a rally in the media segment.

June 22, 2009:CBS CFO Steps Down
Fred Reynolds relinquished his CFO duties July 20. He’ll be succeeded by Joseph Ianiello, who's been deputy CFO since November.

June 8, 2009: “S&P Cuts CBS Credit Rating
The rating outlook is negative, and was downgraded in part on falling automotive revenues.

May 28, 2009: “CBS Increases Senior Note Offering
CBS Corp. is reopening its senior note offering to raise another $250 million.

May 8, 2009: “CBS TV Segment Revenues Down 12 Percent
CBS’s results for the first quarter reflected the absence of political spending on TV as well as the soft market.