Walmart's New Health Food Push: Is It Too Hard to Swallow?
Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerCBS (NYSE: CBS), which competes with Disney's (NYSE: DIS) ABC, News Corp.'s (NYSE: NWS) Fox, and General Electric's (NYSE: GE) NBC, is scheduled to report earnings for the third quarter on Thursday. This is going to be an important one for the broadcaster. Why, you ask? Well, have you checked out the company's stock lately? It's priced in single digits! As of Tuesday's close, CBS was pegged at $8.83 per share. It actually rose over 13% on that day (along with the rest of the euphoric market), so who knows, maybe it'll crack the $10 level at some point.
According to Earnings.com, Wall Street expects $0.40 per share. That's an $0.08 drop compared to the previous year's quarter. Or, we can express it as a 16.7% decrease. What investors will be looking at very carefully is the quality of the cash flow. At this point, CBS is all about the dividend. I alluded to this back in August when I talked about the broadcaster's second-quarter report. If the cash is still coming, then things might be okay. Because at a yield of over 12%, a potential investor has to be careful when considering CBS' shares.
High yields can be dangerous, as we all know. But CBS is confident in its dividend and its ability to grow the payout over time, and I'm sure management will be expressing confidence in that concept yet again come Thursday. I'd also like to hear how the CNET acquisition is going, what management thinks of its various television shows, what's going on at Showtime, and, perhaps most importantly, I'd be very interested in any comments about Sumner Redstone and the little drama he's been going through in terms of needing to sell stock to alleviate some financial issues. Even the big guys are having problems in these tumultuous times.
CBS has a good history of beating analysts at their game. However, I wouldn't take the chance of betting on the stock ahead of its earnings. Advertising has been affected by the slowdown in the economy. Nevertheless, we are in the midst of a presidential campaign, so perhaps that will help things out (this article, interestingly enough, seems to indicate that the effect of political campaigns may not necessarily be stellar for some TV stations). At the end of the day, CBS is a stock for income investors, not those who enjoy growth. Again, people will be keeping an eye on the cash.
Disclosure: I own Disney and GE; positions can change at any time.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
