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CBS Corporation (CBS)’s Earnings Announcement in Detail

Takeaways

The key revenue component, advertising, remains on the increase. Cable is expanding its presence and CBS may grab increased share of that market (in addition to Showtime it also owns the CBS Sports and Smithsonian Networks). If CBS can maintain its top position in the broadcast network market, while diversifying into growth businesses simultaneously, it should be a good selection. A favorable economy would help, as well. I continue to like the shares long term. Along with that, I also reiterate my recommendation of television station owners, including Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) as an income holding. Those entities are cash rich and pay substantial dividends. Sinclair owns broadcast stations in small- and mid-sized markets. Sinclair, too, is dependent on a stable ad market, but faces more challenges than CBS due to a lack of asset diversification. Its sole business is the ownership of broadcast TV affiliates, the largest proportion being FOX stations. Earnings are healthy, though the rate of growth, if any, is apt to be slim.

Summary

CBS is intent on not only being the most popular television network, but broadening its audience into new media platforms and altering its asset mix for the purpose of enhancing profitability. It is, as always, returning cash to shareholders, as well. Accordingly, I continue to think CBS is a good long-term portfolio addition.

The article CBS’ Earnings Announcement in Detail originally appeared on Fool.com and is written by Damon Churchwell.

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