NEW YORK (TheStreet) -- CBS Corp (CBS - Get Report) shares are down -3.3% to $56.12 in early market trading on Friday following the release of the company's first quarter earnings results.
Declining returns from the company's entertainment division -- -9% to $2.3 billion -- helped drive overall revenues down 5% from the previous year to $3.86 billion, missing analysts estimates of $3.92 billion.
The media company reported a 5.6% increase in quarterly earnings to $468 million, or 78 cents per share, beating analysts estimates by 3 cents per share.
TheStreet Ratings team rates CBS CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate CBS CORP (CBS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, notable return on equity, reasonable valuation levels and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CBS's revenue growth has slightly outpaced the industry average of 5.1%. Since the same quarter one year prior, revenues slightly increased by 5.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CBS CORP has improved earnings per share by 22.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CBS CORP increased its bottom line by earning $3.01 versus $2.48 in the prior year. This year, the market expects an improvement in earnings ($3.47 versus $3.01).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, CBS CORP's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 65.07% to $553.00 million when compared to the same quarter last year. In addition, CBS CORP has also vastly surpassed the industry average cash flow growth rate of 3.44%.
- You can view the full analysis from the report here: CBS Ratings Report