Viacom (VIA.B) Q3 2011 Earnings Call August 05, 2011 8:30 am ET Executives Thomas Dooley - Chief Operating Officer and Director James Barge - Chief Financial Officer, Chief Accounting Officer and Executive Vice President Sumner Redstone - Founder and Executive Chairman Philippe Dauman - Chief Executive Officer, President and Director James Bombassei - Senior Vice President of Investor Relations Analysts Jessica Cohen - BofA Merrill Lynch Benjamin Swinburne - Morgan Stanley Michael Nathanson - Sanford Bernstein Richard Greenfield - BTIG, LLC Alan Gould - Evercore Partners Inc. David Miller - Caris & Company Douglas Mitchelson - Deutsche Bank AG Tuna Amobi - S&P Equity Research David Bank - RBC Capital Markets, LLC Presentation Operator
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And now I'll turn the call over to Sumner.Sumner Redstone Thank you, Jim. Good morning, everyone. I'm very pleased once again to join Philippe, Tom and Jimmy across another quarter of truly outstanding results for Viacom. We continue to prove that we have the right strategy, the best possible management team for executing our plans. Our Media Networks are creating hit after hit, sought after by both audiences and advertisers and Paramount Pictures is putting together a truly unprecedented year of broad profits as shown. Viacom has found its stride, fueled by creativity, discipline and vision and expertise. Each day provides new opportunities to deliver additional value to our investors, which gives me great confidence that Viacom's string of successes are still years and years and years ahead of us. Now I would like to turn the call over to my close friend and colleague, Philippe, about whom I've previously said is one of the wisest, if not the wisest man, I have ever met in my life. Philippe? Philippe Dauman Thank you so much, Sumner, and good morning, everyone. I'm pleased you could join us today. There is no question that Viacom is at the top of its game and we're pushing the bar higher. From a creative standpoint, we are developing more original programming for our Media Networks and our branded digital properties than ever before, all driven by the research we performed to ensure that we know and we understand our audiences better than anyone else. These efforts are fueling our growth in the U.S. and around the world. Many of our most successful programs in the U.S. have grown into regional and even global hits, and we are continuing to develop new brands and properties in international markets that can be introduced in a variety of countries around the world including the U.S. These creative successes continue to attract new marketing partners who want to reach the engaged audience as we deliver.
At our film studio, Paramount Pictures, we remain focused on developing strategic film slates based on a foundation of proven franchises and branded films. This approach is working, and will continue to be a valuable guide as we expand into the animation genre. Throughout the company, we also continue to drive greater operating efficiencies, work that will continue into the future so we can invest more of our resources in the content that appears on all of our screens and improve our margins.This morning, I will review our financial results briefly as well as a few highlights from our divisions. Tom and Jimmy will provide more detail in our performance, and then, we'll be happy to take your questions. We will speak to the adjusted numbers during our discussion this morning. Consolidated revenues were $3.77 million in the third quarter, up 15% driven by double-digit revenue growth in both Media Networks and Filmed Entertainment. Media Networks revenues increased 16% on solid growth in advertising, affiliate and ancillary revenue. Filmed Entertainment revenues grew 13%, principally driven by double-digit increases in TV licensing and home entertainment revenue. Viacom's adjusted net earnings for continuing operations grew 35% to $583 million in the June quarter on higher operating and equity income. Our adjusted diluted earnings per share were $0.99, up 39% from the $0.71 earned in the prior year. During the quarter, we announced a substantial increase in our quarterly dividend, up 67% to $0.25 per share. This action was taken in addition to our stock buyback program. Consistent with what I said during our last call, we purchased $700 million in stock in the June quarter and we intend to buy back another $900 million in this quarter for a total of $2.5 billion by the end of fiscal 2011. The pace of our buyback reflects Viacom's strong free cash flow and our commitment to returning cash to our shareholders while also investing in the long-term growth of our business. Read the rest of this transcript for free on seekingalpha.com