Clear Channel earnings surge 51%

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SAN ANTONIO -- Radio station and billboard advertising leader Clear Channel Communications Inc. said Thursday third-quarter earnings surged 51%, as outdoor advertising revenue continued to grow sharply.

Net income for the July-September period climbed to $279.7 million, or 56 cents per share, from $185.9 million, or 38 cents per share, in the same period last year.

Analysts surveyed by Thomson Financial had only expected profits of 38 cents per share, on average.

The company sold its 56 television stations in April. Excluding those operations, earnings rose 51% to $256.3 million, or 52 cents per share, from $169.8 million, or 34 cents per share, last year.

Revenue rose 5% to $1.73 billion from $1.64 billion last year. A favorable exchange rate added $32.4 million to the total. Excluding the foreign exchange boost, revenue rose 3%. Analysts surveyed by Thomson expected higher revenue, an estimated $1.77 billion.

The company did not schedule a conference call for Thursday because of a pending $19.5 billion private equity buyout, but in its release, it said revenue for the radio division was pacing down about 4.7% for the fourth quarter, while revenue for the outdoor division was trending up 7.7%.

Shareholders approved a leveraged buyout offer led by Thomas H. Lee Partners and Bain Capital Partners on Sept. 25. The deal, which Clear Channel hoped to close by year's end, is undergoing antitrust and Federal Communications Commission review. The company said the deal may not close until early next year.

Under the buyout, shareholders will receive $39.20 per share. In an unusual structure designed to placate institutional share owners who opposed deal, shareholders also had the option of holding on to a stake in the new company once the private equity deal closes. About 30% of the company will continue to be owned by public shareholders.

The radio business, which flourished during the dot-com boom with heavy advertisements, has been flat for years, and during the third quarter, Clear Channel reported almost no revenue growth for radio advertising.

Its billboard and other outdoor advertising, however, has enjoyed significant growth. During the third quarter, Clear Channel reported $817.5 million in outdoor sales, compared to $720.3 million in the same period of 2006 -- a 14% increase. Clear Channel owns about 90% of the world's largest outdoor advertising business, with 973,000 signs; the remainder of that business trades as a separate stock.

Clear Channel, the nation's largest radio station operator, had planned to sell 448 stations, mostly in smaller markets apart from the buyout deal. It reached agreements for 364 of those stations, but agreements on 187 of them have fallen through, the company said Thursday.

Clear Channel is still looking for buyers for the unsigned stations.

Shares lost $1.06, or 3%, to close at $34.85 Thursday.

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Clear Channel Communications Inc.: www.clearchannel.com
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