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Media Money
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CNBC.com |
CBS has strong ratings at its flagship network, but that doesn't necessarily translate into strength at its parent company; after the bell today CBS Corp [CBS
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] is projected to report weak quarterly results.
Analysts expect first quarter earnings to fall over 80 percent to $0.07 per share on 11 percent lower revenue of $3.26 billion.
Analysts expect revenues to fall by about a third at the TV stations, by about 18 percent at the radio stations and about 15 percent in the outdoor billboard division. The company has $1.6 billon in debt coming due in October 2010, raising the big question: can sustain its dividend payouts?
It all comes down to the fact that CBS is more exposed to the weak ad markets than any other media giant.
Ads comprise about two-thirds of its revenue and it doesn't have stability that subscription revenue provides to competitors like Time Warner [TWX
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] and Viacom [VIA
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]. Last fall the company wrote down $14 billion in broadcasting and billboard assets and it's only gotten worse. Investors are hoping that CBS will be able to lock down advertiser commitments during the "Upfront" ad sales period.
Ahead of the ad sales period at the end of May, the eye network launched a big ad campaign boasting its ratings success. It's the only broadcast network to increase its audience this year; prime time TV viewership is up 12 percent from last year when the writers strike shut down productions. CBS also has the season's only real new hit, "The Mentalist." Even"CBS Evening News With Katie Couric" has increased its audience 1 percent this season. But advertises are carefully weighing each dollar they spend and holding back on ad commitments until the last minute. They are searching for more targeted, less expensive ways to target viewers than the traditional 30 second spot.
On the earnings call today investors want guidance from CEO Les Moonves on his plans for the company in light of weak ad markets. And with Disney [DIS
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] joining NBC Universal [GE
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] and News Corp [NWS
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] as a partner in Hulu just last week, you can bet there will be some questions about whether it makes sense for CBS to continue to digitally distribute its content on its own. And since Sumner Redstone is Chairman of the company, we'll be all ears.
Media Money will report on the numbers as they cross the wires at 4 pm ET and I'll be blogging about the commentary on the earnings call.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes