The earnings season is in full swing with 89.6% of the S&P 500 companies having reported so far. The attention has now turned to the media space given the spate of earnings releases from the top players – Time Warner (TWX - Free Report), CBS Corp (CBS - Free Report), Twenty-First Century Fox (FOXA - Free Report) and The Walt Disney Co. (DIS - Free Report) .

Let’s take a look at their top and bottom lines:

Earnings in Focus

CBS and Twenty-First Century topped our estimates on both fronts. Earnings per share of $1.04 at CBS surpassed our earnings estimate by 7 cents while revenues of $3.26 billion edged past our estimated $3.11 billion. On an annual basis, earnings and revenues grew 12% and 9%, respectively, from the year-ago quarter.

On the other hand, Twenty-First Century Fox posted earnings per share of $0.36 and revenues of $6.75 billion that beat the Zacks Consensus Estimate by a couple of cents and $0.02 million, respectively. While earnings declined from the year-ago quarter of 45 cents, revenues rose 2%.

While CBS and Twenty-First Century Fox beat, Time Warner and CBS lagged our revenue estimates. Time Warner reported earnings of $1.33, trumping the Zacks Consensus Estimate of $1.19 and improving 3% from the year-ago quarter. Revenues of $7.33 billion rose 5% year over year but fell marginally short of our estimated $7.34 billion. Earnings per share of $1.58 at Disney topped the Zacks Consensus Estimate of $1.53 but decreased 2.5% year over year. Revenues were flat at $14.24 billion and well below our estimate of $14.44 billion.

Given the string of earnings beat, PowerShares Dynamic Media Portfolio (PBS- Free Report) has been on the investors’ radar.  

ETF in Focus

PBS is the only pure play fund providing exposure to media stocks under one roof. It seeks to offer capital appreciation by investing in companies that are selected on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value by tracking the Dynamic Media Intellidex Index. This approach results in the basket of 29 stocks with an expense ratio of 0.61%. The in-focus stocks are among the top five holdings in PBS, accounting for nearly 5% share each.

The product has amassed $102 million in its asset base and trades in a lower volume of 45,000 shares a day on average. Though it has lost 2.4% over the past five days, it is up 6.8% in the year-to-date time frame. PBS has a Zacks ETF Rank of 3 or ‘Hold’ rating with a Medium risk outlook, suggesting some upside potential in the coming months.

Industry Trend Fuels PBS

With changing consumer habits and the new age of digital entertainment, the media industry is going through a consolidation phase. Investors are moving quickly to the world of web through tablets and smartphones, pushing traditional print media and cable TV into distress.

However, the ongoing shift to the online-based platform will continue to provide a boost to media stocks and the ETF. Further, many players from segments like Broadcast Radio and Television, and Cable Television in this sector belong solid a Zacks Industry Rank in the top 39%, suggesting that they are poised to outperform their peers in the coming months.