Shares CBS Corp. (NYSE: CBS) retreated Friday morning, following the media company’s first-quarter report late Thursday. At issue was a 9% year-on-year decline in CBS’s entertainment division to $2.3 billion, which helped drive overall revenues down 5% to $3.86 billion, shy of analysts’ consensus projections.

But the New York-based company also said per-share earnings came to $0.75, a 6% rise from a year ago and higher than analysts had expected. Profits received a boost from increased licensing of the company’s programming, 6% higher than a year ago, and higher payments from cable and satellite operators that carry CBS channels, a 9% gain. Demand in international markets for hit shows such as “NCIS” and “The Good Wife” was strong.

While advertising was down 12% in the first quarter, due largely to not having the Super Bowl this year, the broadcaster expects heavy spending on political advertising for mid-term elections, particularly in Florida and Michigan, to be a boost in the second half of the year.

More original programming over the summer, Thursday Night Football in the fall season and higher ad rates also are expected to boost revenue in the second half of the year.

In addition, the conversion of CBS Outdoor Americas Inc. (NYSE: CBSO) to a real estate investment trust and the subsequent spin-off brought in about $5 billion to CBS, which it may use for buybacks and potential acquisitions.

For investors who see hope in CBS’s reduced reliance on the volatile advertising market in favor of increased fees from cable, satellite and Internet video providers may see the post-earnings pullback as an entry point. Note that shares are down more than 12% year to date after falling 5% to $55.09 Friday morning. Shares have traded in a range of $45.61 to $68.10 in the past year. Analysts have a mean price target of $63 for the shares.

By mid-day Friday, total option volume in CBS had already exceeded its full-session average for the past month. Calls were outpacing puts by nearly three to one, signaling an expected rebound.

ALSO READ: Companies With the Best (and Worst) Reputations

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.