CBS tops estimates, but remains weak

The company's press release would like you to believe that the challenges for CBS will start to abate sooner rather than later. When it comes to the advertising markets, I have read many accounts that the situation has stabilized and will be getting better as the year progresses. From this point of view, one could argue the stock is a buy.

It's difficult, though, to say that you wouldn't be speculating somewhat here. Every division has had its revenue challenges. Even the interactive division saw a top-line decline, once you exclude the effect of CNET. And a quick note on something particularly annoying (to me, at least): the publishing segment saw a decline in operating income of 58%. Besides restructuring charges, higher author royalties were blamed for the precipitous drop. You know, considering the state of the economy and the competitive attacks on the printed word by digital platforms, you would figure that management would have done something to get royalty rates down by now. Oh well.

Okay: the trader in me says that maybe CBS might be a buy on a pullback, and the investor in me says that there are better alternatives out there if you want exposure to media content. Overall, I'd say don't buy unless an unusual day comes along and the stock sinks over a buck or two with huge volume on news that either isn't so bad or is totally unrelated to the CBS situation. Such an event might make you a quick profit.

Disclosure: I own Disney, GE; positions can change without notice.