Factors To Consider Ahead Of CBS Corp's (CBS) Q3 Earnings

CBS Corporation (NYSE:CBS) is set to release third-quarter 2019 results on Nov 12.

The Zacks Consensus Estimate for third-quarter revenues is currently pegged at $3.37 billion, indicating 3.2% growth from the figure reported in the year-ago quarter.

Moreover, the consensus mark for earnings stands at 91 cents per share, down 32.6% over the past 30 days, implying a decline of 26.6% from the year-ago quarter’s reported figure.

Notably, the company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average positive surprise being 0.4%.

In the second quarter, CBS reported adjusted earnings of $1.16 per share that increased 3.6% from the year-ago quarter and beat the Zacks Consensus Estimate by 2.7%.

Also, revenues rose 12.9% year over year to $3.81 billion, surpassing the consensus mark by 2.6%.

Let’s see how things are shaping up prior to this announcement.

Factors to Watch

CBS’ strong over-the-top (OTT) content slate along with the broadcast of popular events on its Television Network is expected to have positively impacted its third-quarter 2019 top line.

The content strength of the company’s OTT services — CBS All Access and ShowTime — is expected to have boosted subscriber growth. Availability of shows like Why Women Kill is likely to have improved CBS’ penetration among the 18-49 demography in the to-be-reported quarter.

Moreover, ShowTime gained popularity among broadband-only households in the second quarter, a trend that most likely continued in the third quarter owing to a robust content portfolio.

CBS has been increasingly licensing content to platforms like Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN), Fox and ABC, which again highlights its content strength.

During the quarter, CBS entered multi-year content carriage agreements with Altice, Nexstar Media Group and AT&T (NYSE:T), reflecting strong demand for its content.

Additionally, the growing popularity of CBS direct consumer offerings, including CBS All Access, CBS.com and CBSN, is expected to have benefited ad revenues in the to-be-reported quarter.

CBS and Viacom to Merge

On Aug 13, CBS and Viacom (NASDAQ:VIAB) announced a definitive agreement to combine in an all-stock merger, creating a new company — ViacomCBS — with more than $28 billion in revenues.

What Our Model Says

According to the Zacks model, a company with a positive Earnings ESP along with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates. But that is not the case here.

CBS has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Stocks With Favorable Combination

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Twin River Worldwide Holdings (NYSE:TRWH) has an Earnings ESP of +13.25% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Viacom has an Earnings ESP of +13.38% and a Zacks Rank #3.

Momo (NASDAQ:MOMO) has an Earnings ESP of +3.94% and a Zacks Rank #3.

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