Will CBS Achieve Its 2018 Outlook?


Nov. 20 2020, Updated 12:05 p.m. ET

CBS delivers consistent growth

In February, before its boardroom power struggles deepened and its CEO, Les Moonves, stepped down, CBS Corporation (CBS) issued a strong 2018 outlook.

According to its outlook, the company is working to deliver revenue growth in the high single digits in 2018 over the revenue of $13.7 billion it reported in 2017. On the bottom line, the company aimed to deliver adjusted EPS growth in the high teens in 2018 over the adjusted EPS of $4.40 it reported in 2017.

Are these performance targets achievable? CBS has delivered consistent revenue growth in all three quarters of 2018 so far. In the first quarter, its revenue rose 13% YoY (year-over-year). Its revenue rose 6.0% YoY in the second quarter and 3.0% YoY in the third quarter to $3.3 billion.

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Strength in the advertising business

CBS’s acting CEO, Joe Ianniello, described the third quarter as the best in the company’s history and said that CBS remains on track to achieve its 2018 outlook.

CBS’s gains in its latest quarter were supported by strength in its advertising business, where revenue rose 14% YoY thanks to higher political advertising sales. Viacom (VIA) wasn’t so lucky, as its domestic advertising sales fell 6.0% YoY in the quarter.

Share repurchases

The adjusted EPS of $4.40 CBS reported in 2017 were a record for the company. Its secret to driving EPS improvements has been share repurchases, which have reduced its outstanding share count. So far in 2018, CBS has reduced its number of outstanding shares by 9.4 million through share repurchases that have seen the company return $500 million to shareholders.

The Walt Disney Company (DIS), Comcast (CMCSA), and Charter Communications (CHTR) returned $3.6 billion, $1.3 billion, and $1.1 billion to their shareholders through share repurchases, respectively, in the third quarter.


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