CBS's CEO Discusses Q1 2012 Results - Earnings Call Transcript


Q1 2012 Earnings Call

May 01, 2012 4:30 pm ET


Adam Townsend - Executive Vice President of Investor Relations

Sumner M. Redstone - Founder and Executive Chairman

Leslie Moonves - Chief Executive Officer, President and Director

Joseph R. Ianniello - Chief Financial Officer and Executive Vice President


Benjamin Swinburne - Morgan Stanley, Research Division

Jessica Reif Cohen - BofA Merrill Lynch, Research Division

Michael C. Morris - Davenport & Company, LLC, Research Division

Laura Martin - Needham & Company, LLC, Research Division

Douglas D. Mitchelson - Deutsche Bank AG, Research Division

David Bank - RBC Capital Markets, LLC, Research Division

David W. Miller - Caris & Company, Inc., Research Division

John Janedis - UBS Investment Bank, Research Division

Michael Nathanson - Nomura Securities Co. Ltd., Research Division

William G. Bird - Lazard Capital Markets LLC, Research Division

Anthony J. DiClemente - Barclays Capital, Research Division

Marci Ryvicker - Wells Fargo Securities, LLC, Research Division



Good day, everyone, and welcome to the CBS Corporation First Quarter 2012 Earnings Release Teleconference. Today's call is being recorded. At this time, I'd like to turn the call over to the Executive Vice President of Investor Relations, Mr. Adam Townsend. Please go ahead.

Adam Townsend

Good afternoon, everyone, and welcome to our first quarter 2012 earnings call. Joining me for today's discussion are Sumner Redstone, our Executive Chairman; Leslie Moonves, President and CEO; and Joe Ianniello, Executive Vice President and CFO.

Sumner will have opening remarks, and we'll turn the call over to Les and Joe, who will discuss the strategic and financial results. We will then open the call up to questions. Please note that statements on this conference call relating to matters which are not historical facts are forward-looking statements, which involve risks and uncertainties that could cause actual results to differ. Risks and uncertainties are disclosed in CBS Corporation's news releases and Securities filings. A webcast of this call and the earnings release related to today's presentation can be found on the Investors section of our website at

Reconciliations for non-GAAP financial information related to this call can be found in our earnings release or also on our website.

And with that, it's now my pleasure to turn the call over to Sumner.

Sumner M. Redstone

Thank you, Adam. Good afternoon, everyone. I thank you all for being with us today. CBS' performance this quarter was nothing short of amazing. The numbers prove we are operating for our vision of incredible strength, and the momentum keeps building and building and building. We have world-class content that people want to see, and we are delivering it in a way they want to see it. And because our content is so good, it commands a premium on every platform. Our content is the best, actually. As we look ahead, I know we have the right strategy in place to propel CBS even beyond where it is today. I know this because we have a management team that proves me right quarter after quarter after quarter. None of this immense success will be possible without this management team.

As you know, the executive in charge of this great management team is Les Moonves, CBS' President and CEO. So it gives me tremendous pleasure to turn this call over to my good friend, Les, a man I speak of an appropriately call him genius, so he can tell you more about our terrific results. Les, the ball is in your court.

Leslie Moonves

Thank you very much, Sumner. Good afternoon, everybody, and thank you for joining us once again. We told you during our last call that this quarter would be a terrific start to the year. And as you can see from the numbers today, it is. In fact, since we became a stand-alone corporation, we posted record first quarter results in 5 key financial metrics: Revenue was up 12%; OIBDA, up 34%; operating income, up 47%; net income, up 80%; and EPS of $0.54 was up 86%. As you can see, each category had healthy double-digit increases and our best ever for a first quarter.

We are on a tremendous run, one that we will be very confident will also produce a record 2012 and an extraordinary 2013. We have many reasons to be confident. Our core business is solid. Advertising dollars are growing, and that will only get better in the second half of the year when political spending ramps up. We also have a number of hit shows ready to be sold into domestic syndication over the next 2 years, and international syndication continues to be a dynamic story.

And as you know, one of the most powerful developments in our business model is the growth of steady and recurring non-advertising revenue, which is increasingly paying off. Syndication, retrans and online streaming are having a huge impact on our numbers and are not directly tied to the economy. All told, 39% of our total revenue in the first quarter came from non-advertising sources. Many of these revenue sources did not even exist just a few short years ago. As we continue to transform our business model, you'll see that number rise even higher. None of this would be possible without premium content.

Across the company, we have industry-leading programming in every business in which we compete, and it's getting more valuable by the day. Today, I'm going to walk you through our first quarter numbers, then I'll give you some highlights about our segments before I turn it over to Joe. After that, we'll be happy to take your questions.

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