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Tickers in this Article: CBS
CBS (NYSE:CBS) is expected to report increased earnings when it releases its third quarter results on Wednesday, November 7, 2012. The consensus estimate is anticipating a profit of 61 cents a share, an increase from last year's 50 cents per share.

Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: 12 Things You Need To Know About Financial Statements

What to Expect: CBS is expected to report 61 cents per share, up 22% from a year ago when the company reported earnings of 50 cents per share.

The consensus estimate, while unchanged in the past month, is down from 63 cents three months ago. Analysts are expecting earnings of $2.54 per share for the fiscal year.

CBS is expected to report revenue of $3.49 billion for the quarter, beating last year's figure of $3.37 billion by 3.7%. CBS is expected to report revenue of $14.95 billion for the fiscal year.

Company Performance: Revenue has risen by an average 1.9% year-over-year in the last four quarters. The biggest increase was in the first quarter, up 11.8% from the year-earlier quarter.

CBS' P/E ratio is 14.4. There are generally two price/earnings ratios calculated: the first, called the trailing Price/Earnings ratio, is calculated using the previous years actual earnings; the second, called forward Price/Earnings ratio, is calculated using the next year's estimated earnings. A high or low P/E ratio is not good or bad in and of itself, but a company trading with a high P/E ratio must continue to post strong financial performance or its stock price is likely to fall. SEE: How To Find P/E And PEG Ratios

The stock price has fallen 5.8% to $33.45 from $35.50 since August 6, 2012. The stock saw one of its worst stretches when its price fell $2.66 per share between October 5, 2012 and October 11, 2012.

The Competition: CBS is a mass media company with operations in entertainment, cable networks, publishing, local broadcasting, and radio. Analysts are optimistic about CBS, with 17 of 24 assigning it a buy rating. The rating has remained steady for the past three months.

The company's closest competitor in the broadcasting and cable tv industry is Comcast (CMCSA). Analysts are more optimistic about CBS than about Comcast. Only 18 out of 23 analysts rate the latter a buy.

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