CBS and Viacom report earnings Thursday and Friday, respectively, kicking off the season for Big Media.
Reporting from Los Angeles, CNBC’s Julia Boorstin said Viacom (VIA) is widely expected to see strong upside from its Paramount movie studio, buoyed by the successful performance of this summer’s ‘Transformers’ movie. Viacom’s cable division, particularly its flagship MTV Networks, has been struggling and the company’s earnings will show if it has taken a toll on the parent company’s bottom line.
CBS (CBS), formerly a part of Viacom, is not expected to fare nearly as well. The CBS network has had a rough fall television season, falling to #3 in the highly coveted younger demographic (although still #1 in overall viewers), Boorstin reported. The company gets nearly 80% of its revenue from advertising, leaving it extremely exposed to a potential recession in the ad complex. CBS has to count on political ads to counteract its fall in the ratings going forward, Boorstin said.
Niether VIA nor CBS appear particularly enticing to any of the traders. Pete Najarian said IAC/InteractiveCorp (IACI) looks to have bottomed, but it’s the only remotely interesting media play.
Guy Adami thinks TimeWarner (TWX) could be at or near a bottom, too. With a turnaround seemingly in order, he said TWX could go to $24.
Jeff Macke would be a buyer of Disney (DIS). It has good management under CEO Bob Iger, its possibly the only media play making money off the weak U.S. dollar thanks to its theme parks and it isn’t as exposed to the negative advertising space, he said.
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Trader disclosure: On Oct 31, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Najarian owns options in (BIDU), (GOOG), (MER), (YHOO); Macke owns (YHOO), (DIS); Carter Worth’s firm is a market maker in (DRYS), (YHOO)