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Earnings Preview: CBS 1Q seen up on sports, Amazon

LOS ANGELES (AP) -- Broadcaster CBS Corp. is expected to report rising quarterly profits and revenue after the market closes Wednesday, helped by hosting the Super Bowl and completing a new online video deal with Amazon.com Inc.

WHAT TO LOOK FOR: Underlying ad revenue growth will be in focus, as will the benefits of a renewal with Amazon. For the first time, the deal gives the retailing giant the online streaming rights to a drama, "The Good Wife," that is still airing on TV.

The Super Bowl is expected to have added about $250 million to ad revenue, according to Nomura analyst Michael Nathanson. After stripping out the impact, ad revenue at the CBS broadcast network is seen up 1 percent, he said in a research note.

Chief Executive Les Moonves may also discuss several challenges to the broadcast TV model, including one coming from Aereo, a New York-based startup that relays signals it plucks for free from the airwaves and sends to subscribers who pay $8 a month. CBS and other broadcasters argue that doing so without paying for the retransmission rights is illegal, but Aereo has so far won preliminary court rulings.

The broadcaster may also further discuss its minority investment in Syncbak, a technology firm that allows people to see local TV station broadcasts on mobile devices connected to the Internet. The technology could be an alternative to Aereo, or just be offered as part of a pay TV subscription.

WHY IT MATTERS: As CBS grapples with changing viewer habits, its business model has to adjust. While it is gaining new revenue and profit from online video distributors, such services have also endangered the traditional TV business. Its ability to adapt to change is fundamental to remaining relevant to consumers.

WHAT'S EXPECTED: Analysts polled by FactSet expect CBS to post adjusted earnings of 68 cents per share on revenue of $4.02 billion.

LAST YEAR'S QUARTER: In the first quarter a year ago, CBS posted adjusted earnings of 54 cents per share on revenue of $3.92 billion.