Earnings Preview: CBS 4Q profit, sales seen higher

LOS ANGELES (AP) -- CBS Corp. reports its fourth-quarter earnings after the market closes Thursday, with analysts expecting an increase in revenue and profit thanks to an advertising uptick helped by the U.S. presidential election.

WHAT TO WATCH FOR: Trends in non-political advertising. While the election should have given CBS a predictable bump in ad revenue, underlying trends in regular ad spending will give a better picture about how the company will do this year.

Also of interest will be its outdoor billboard business. CBS said it plans to convert its U.S. outdoor business into a real estate investment trust that returns 90 percent of its profits to shareholders, and sell its outdoor business in Asia and Europe.

Last week, CBS filed new securities documents that showed its U.S. outdoor business results on their own, stripping out the businesses that will be sold as discontinued operations. The results were somewhat lower than analysts had expected and some of them trimmed their estimates.

THE BIG PICTURE: CBS, controlled by shareholder Sumner Redstone, generates most of its revenue from advertising but it has been getting paid fees by TV signal distributors for the signals from its TV stations. It has also been selling its older shows to online video distributors like Amazon and Netflix.

THE ANALYSIS: Analysts have said the conversion of the U.S. outdoor business into a REIT would have immediate benefits because the steady profit distributions would be valued more highly by shareholders than currently. The conversion and presumed spin-off of some of the shares in the REIT would raise cash that could be used for share repurchases.

And as long as the economy continues to grow, CBS' ad revenue should keep going higher.

WHAT'S EXPECTED: Analysts polled by FactSet expect adjusted earnings of 70 cents per share on revenue of $3.88 billion.

LAST YEAR'S QUARTER: CBS earned an adjusted 57 cents per share on revenue of $3.78 billion.