The Zacks Analyst Blog Highlights: CBS, Netflix, Amazon.com, Lions Gate Entertainment and NiSource

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Jul 30, 2013, 09:30 ET

CHICAGO, July 30, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include CBS Corporation (NYSE:CBS-Free Report), Netflix, Inc. (Nasdaq:NFLX-Free Report), Amazon.com Inc. (Nasdaq:AMZN-Free Report), Lions Gate Entertainment Corp. (NYSE:LGF-Free Report) and NiSource Inc. (NYSE:NI-Free Report).

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Here are highlights from Monday's Analyst Blog:

CBS Extends Share Buyback $5.1B

CBS Corporation (NYSE:CBS-Free Report) extended its current share repurchase authorization to a total of $6 billion as the company enhanced the share repurchase program by an additional $5.1 billion.

Since the inception of the share repurchase plan in Jan 2011, the company bought back $3.75 billion worth of shares. Alongside, CBS Corporation announced a quarterly dividend of 12 cents a share to be paid on Oct 1, 2013, to shareholders of record as of Sep 10.

CBS Corporation has been actively managing its cash flow by generating healthy free cash, making prudent capital investments and enhancing shareholders' return. Moreover, the company is focused on lowering its dependency on advertising and is laying more emphasis on increasing subscription based revenue channels.

Earlier it announced that Platinum Equity has made an offer to buy assets of its CBS Outdoor International business for about $225 million. Moreover, the company decided to convert its CBS Outdoor operations in North America and South America into a real estate investment trust ("REIT") and divest its Outdoor businesses in Europe and Asia.

Alongside, CBS Corporation further strengthened its ties with Netflix, Inc. (Nasdaq:NFLX-Free Report) by extending its multiyear streaming video deal for select library content. Moreover, it entered into a deal with Amazon.com Inc. (Nasdaq:AMZN-Free Report). These measures facilitate CBS in monetizing its content.

The company also acquired the remaining 50% stake in TV Guide Digital, including the TVGuide.com and TV Guide Mobile properties from Lions Gate Entertainment Corp. (NYSE:LGF-Free Report). The addition of TVGuide.com to CBS' impressive portfolio is believed to be a major boost for the company's digital business as both TVGuide.com and TV Guide Mobile enjoy a strong audience in the lucrative TV information category.

We expect the company to benefit from reverse compensation from affiliates, strong demand of its content, digital distribution, syndication sales and retransmission consent.

CBS currently holds a Zacks Rank #2 (Buy).

Will NiSource (NI) Beat Earnings?

NiSource Inc. (NYSE:NI-Free Report) is slated to release its second quarter 2013 earnings results before the market bell on Jul 31. Last quarter, the company reported a negative earnings surprise of 1.43%. Let's see how things are shaping up for the utility operator for this announcement.

Factors to Consider This Quarter

NiSource's pipeline operations are expected to benefit from the current shale boom in the U.S. Moreover, the Minisink Compressor project, part of its Millennium Pipeline program, has already come into service during the second quarter which will spur the company's profitability.

Furthermore, an initial commencement of services at the West Side Expansion venture will act as a tailwind for NiSource. However, tepid macroeconomic conditions in the U.S. are still affecting electricity prices which might offset the company's returns.

Earnings Whispers?

Our proven model does not conclusively show that NiSource is likely to beat earnings this quarter. This is because a stock needs to have both a positive earnings Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP: The Most Accurate estimate stands at 23 cents while the Zacks Consensus Estimate is higher at 24 cents. This comes to a difference of -4.17%.

Zacks Rank #2 (Buy): NiSource has a Zacks Rank #2 (Buy). This combined with an ESP of -4.17% makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

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