Viacom Inc. (VIA)

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Viacom, Inc. (VIA)

Q1 2008 Earnings Call

May 2, 2008 8:30 am ET


Jim Bombassei - Senior Vice President, Investor Relations

Sumner M. Redstone - Executive Chairman of the Board

Philippe P. Dauman - President, Chief Executive Officer, Director

Thomas E. Dooley - Chief Financial Officer, Chief Administrative Officer, Senior Executive Vice President, Director


Douglas Mitchelson - Deutsche Bank

Alan Gould - Natixis Bleichroeder

Michael Nathanson - Sanford Bernstein

Kevin Holt - Van Kampen

Ingrid Chung - Goldman Sachs

Spencer Wang - Bear Stearns

Jessica Reif-Cohen - Merrill Lynch

Michael Morris - UBS

Tuna Amobi - Standard & Poor’s

Benjamin Swinburne - Morgan Stanley

Imran Khan - J.P. Morgan



Good day, everyone and welcome to the Viacom first quarter 2008 earnings release teleconference. Today’s call is being recorded. At this time I would like to turn the call over to the Senior Vice President of Investor Relations, Mr. Jim Bombassei. Please go ahead, sir.

Jim Bombassei

Good morning, everyone. Thank you for taking the time to join us for our first quarter earnings call. Joining me for today’s discussion are Sumner Redstone, our Chairman; Philippe Dauman, President and CEO; Tom Dooley, Chief Administrative Officer and COF; and Jimmy Barge, Controller and Head of Tax and Treasury.

Please note that in addition to our press release, we have slides containing supplemental information available on our website. Before we begin, let me refer you to page number one in the web presentation and remind you that certain statements made on this call are forward-looking statements that involve risks and uncertainties. These risks and uncertainties are discussed in more detail in our filings with the SEC. Reconciliations for non-GAAP financial information discussed on this call can be found in our earnings release or on our website.

And now, I would like to turn the call over to Sumner.

Sumner M. Redstone

Good morning, everyone. I thank you for joining us today. You know what’s always great? [inaudible] and that’s exactly what we did today. Viacom's results in the first quarter were strong -- more than strong and I assure you that we will continue to build on this momentum as we move throughout the year.

The fact is we have all the right ingredients for success at Viacom. Year after year, the value of our compelling entertainment brands continues to rise as new audiences discover and embrace the superior creative content that we deliver. And as we move that content onto more and more platforms here and all around the world, we become a part of our audience’s lives, whether they are kids or teens or adults, or even [baby boomers]. These are the consumers that advertisers value most and we know how to reach and how to connect with them.

Philippe has brought visionary leadership and a focus on execution that has generated a palpable change throughout this entire company. Philippe and Tom and the other members of Viacom's senior management are pushing creativity and efficiency to new heights. They are capitalizing on new opportunities across our businesses. They are fully exploiting our existing partnerships and entering into new relationships that open the door to attractive revenue opportunities in the short and in the long-term, including of course the new premium entertainment joint venture.

I have enormous confidence in our entire team at Viacom and their plans for delivering even greater value for our shareholders. As a matter of fact, I constantly think what a wise decision it was to ask Philippe to join Viacom as the CEO and Tom as the CFO.

And now I will turn this over to Philippe.

Philippe P. Dauman

Thank you very much, Sumner and good morning everyone. I am pleased you could join us today. We have started 2008 with strong momentum. Last year we made substantial changes to our infrastructure and processed and today we are realizing the benefit of that work. While we continue to make improvements, the company is operating at a higher level of effectiveness and efficiency across the board. Our brands and our content continue to be unmatched in the entertainment business. We cater to some of the most valuable and dedicated audiences across every platform and every screen.

Our task is to remain authentic and true to those audiences, providing them with content and experiences that tap into their passions and interest. That task really has not changed over the years but how we go about doing it and the types of experiences and engagement we provide have changed dramatically. Today I am confident that we are fulfilling our mission as well if not better than ever before, and that view is supported by our results.

Throughout the company, we remain focused on our core strategic objectives -- continuing to fuel the creativity that drives our business across platforms, continuing to grow, nurture, and monetize our brands and create new ones, growing and monetizing our digital business, and maintaining the highest level of execution across the company.

Let’s begin with our financial results. For the purposes of our discussion this morning, Tom and I will speak to certain adjusted numbers. Consolidated revenues grew 15% for the quarter to $3.12 billion. Media networks revenues were up 16% for the quarter to $2 billion. Worldwide advertising sales grew 8% and domestic advertising sales grew 7% in the first quarter as we continue to benefit from a strong scatter market, which again increased double-digits over the up-front.

One month into the second quarter, the scatter market continues to hold up and while it is still early in the quarter, we anticipate our second quarter domestic ad sales growth to be comparable to growth in the first quarter.

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