CBS Corporation (NYSE:CBS.A) Q1 2017 Earnings Conference Call - Final Transcript

May 04, 2017 • 04:30 pm ET

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CBS Corporation (NYSE:CBS.A) Q1 2017 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, everyone, and welcome to the CBS Corporation First Quarter 2017 Earnings Release Teleconference. Today's call is being recorded.

At this time, I'd like to turn the conference over to the Executive Vice President of Corporate Finance and Investor Relations, Mr. Adam Townsend. Please go ahead, sir.

Executive
Adam Townsend

Thank you, Gwen. Good afternoon, everyone, and welcome to our first quarter 2017 earnings call. Joining us with today's remarks are Leslie Moonves, our Chairman and CEO; and Joe Ianniello, our Chief Operating Officer. Following Les and Joe's discussion of the company's performance, we will 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 SEC filings.

Reconciliations for non-GAAP financial information related to this call can be found in our earnings release or on our website at cbscorporation.com. A webcast of this call and the earnings release related to today's presentation can also be found on our Investor section of our website.

With that, it's my pleasure to turn the call over to Les.

Executive
Leslie Moonves

Thank you, Adam, and good afternoon, everyone, and thank you for joining us.

I'm pleased to report that CBS delivered a very healthy first quarter. EPS was $1.09, up 15%, representing the 29th consecutive quarter of EPS growth. And revenue came in at $3.3 billion, which was quite an achievement because we were going up against a quarter a year ago when we had the Super Bowl and an extra NFL playoff game. When you exclude those two games, revenue would have been up high single digits for the quarter. CBS' strong performance is the direct result of our clear strategy to diversify our revenue.

During the quarter, affiliate and subscription fees grew 17%, and content licensing and distribution grew 16%. Going forward, all three of our main types of revenue are set up for success in the quarters ahead.

First, affiliate and subscription fees will continue to grow rapidly from multiple sources led by retrans and reverse comp which is on track to be up about 25% in 2017. This will put us more than halfway to our goal of achieving $2.5 billion in this revenue source by 2020. Affiliate and subscription fees are also beginning to benefit meaningfully from CBS All Access and Showtime OTT.

On both services, the combination of original programming and leading library titles is driving our growth, and we are pacing ahead of our goal of 8 million subscribers combined by 2020.

So far, we have been selling each product individually. Starting next week, in addition to each being available on its own, we will begin offering All Access and Showtime as a combined package for the very first time. And yes, the skinny bundles we've long told you about are now here. Last month, CBS and Showtime launched on Google's YouTube TV, and Showtime debuted on