Many viewers may remember 2013's Super Bowl for its blackout, but for host network CBS, the future looks bright.
Late Thursday, CBS Corp. (ticker: CBS) reported fourth-quarter earnings of $393 million, or 60 cents a share, up from 55 cents a share in the year-earlier period. Revenue rose 2% to $3.7 billion. Analysts were looking for earnings of 68 cents a share on revenue of $3.78 billion.
The shares lost ground in early trading, but were up 2.6% to $44.06 in Friday morning trading. I think investors that stay tuned will see more gains.
Although the quarter looks disappointing at first blush, there were some positive metrics for CBS. Subscription fees, from cable and satellite companies, rose 9% to $505 million. And while political campaigning and the Super Bowl helped recent sales, underlying advertising trends also look encouraging. (Next year's midterm elections, a traditionally strong event for CBS, should boost revenue as well.)
Moreover, CBS has been working to improve its content and partnerships. While ratings were sluggish this fall at the flagship CBS Network, it has seen dramatic improvement across demographics, while the programming line-up looks strong going into the second and third quarters. CBS is also garnering revenue from digital rights to its shows, via streaming agreements with Netflix (NFLX) and Amazon (AMZN).
I see CBS shares as attractive with Buy rating and $47 price target on the stock.