(CBS) CBS Corporation – Bull of the Day

CBS Corporation’s (CBS) second-quarter 2012 earnings of $0.65 per share beat the Zacks Consensus Estimate of $0.58 and rose 12% year-over-year on the back of increases in affiliate and subscription fee revenues as well as effective cost management that helped mitigate the fall in advertising revenue. Although total revenue fell 3% to $3,476 million, management remains confident about continued growth momentum in fiscal 2012.

Olympic coverage and this fall’s presidential election will be accretive to the company’s results in the upcoming quarters. The biggest potential risk is CBS’ high dependence on advertising revenue, which is driven by the health of the economy. To mitigate this, the company is striving to add diverse revenue streams to hedge against economic cycles, which include retransmission fees, syndication sales and streaming deals.

CBS’ substantial liquidity positions it to drive future growth and enhance shareholder returns. Currently, we maintain our Outperform recommendation on the stock.

Zacks Investment Research

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