MediaFile

CBS reports its quarterly earnings later today and expectations are… well… low. That’s not surprising to anyone who has watched a parade of bad numbers coming out of the other big media companies this quarter. Viacom. Time Warner. Walt Disney. News Corp. There were few positive notes in any of them.

CBS isn’t likely to break that streak.

So the big questions on the minds of analysts and investors when it comes to CBS are 1). Will it take another big writedown after the $14 billion impairment charge it took last quarter and 2). Will it cut its dividend?

We explored the dividend issue in a piece last week, pointing out that CBS is facing a big debt payment, dwindling cash flow, and must contend with an awful advertising environment. It needs to conserve cash, and could have no option but to cut its dividend (some are calling for it to abandon the payment altogether).

Today, UBS analyst Mike Morris issued a research note ahead of CBS earnings that addressed the dividend question. Here’s what he wrote:

Perhaps more important is the potential for a change to the company’s dividend policy. Currently CBS shares pay a dividend of $1.08 annually for a yield of 20.5% at the current $5.25 share price. As we have previously noted, we view a dividend cut as possible given our estimate of lower cash flow in 2009 and management’s commentary on the 3Q08 earnings call that the dividend is a function of free cash flow. However, we believe that the size of a dividend cut may surprise investors (we expect a cut to $0.30 per share annually, which would imply a 5.7% yield at current levels).

CBS has made a big deal about its dividend. Just three months ago, Chief Executive Les Moonves made clear his commitment to the quarterly payout to shareholders, who, by the way, have seen the stock fall nearly 75 percent in the last 12 months. Yep, 75 percent.

“The dividend is front and center in our strategy to return value to our shareholders” Moonves said on a late October conference call.

Lately, though, doubts about CBS’s ability to keep up the dividend appear to be spreading (to be fair, a number on Wall Street have questioned the payouts for quite some time).  First, on Monday, Sanford Bernstein  analyst Michael Nathanson cut his rating to “underperform” and warned that CBS might have to “drastically” reduce the dividend.