CBS could be in for a tough third quarter this year as the impact from sagging NFL ratings catches up to the network’s advertising revenue, according to analyst firm Credit Suisse.
"We expect third-quarter network advertising to decline 3 percent (previously +1 percent), driven by soft ratings for both the summer schedule and for the start of the NFL season," wrote Credit Suisse. "With only one of the three content licensing deals we expected for the second half announced in third quarter, we also expect content licensing revenue growth to be skewed to the fourth quarter."
The firm said CBS' Sunday NFL ratings are down 17% annually through the first part of the 2017-2018 season.
Credit Suisse analyst Omar Sheikh lowered his EPS estimate for CBS by 5%. According to CNBC, he similarly lowered expectations for 21st Century Fox due to NFL ratings.
RELATED: NFL ratings down 11% this season, Nielsen says
Credit Suisse is not the only analyst firm urging caution around CBS as the NFL faces viewership woes and repeated pressure from President Donald Trump regarding NFL players protesting racial inequality and police brutality during the National Anthem.
JPMorgan Chase analyst Shawn Quigg told investors to watch out heading into week 4 of the NFL season and lock in an option to sell shares at a higher price in case CBS stocks fall after ratings are in for those games.
Earnings estimates are being adjusted for the NFL’s major broadcasters including CBS and Fox amid Nielsen’s somewhat dire figures around the season.
Last month, the firm said ratings for NFL national television broadcasts were down 11% from the previous season. After averaging 17.63 million viewers for the first three weeks of the 2016 season, average viewers for the current season have declined to 15.65 million—but those figures don’t include regionally broadcasted Sunday afternoon games.