L.A., N.Y. radio woes sink Emmis in Q1

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Weakness at radio stations in Los Angeles and New York were blamed Tuesday when Emmis Communications Corp. reported a fiscal first-quarter loss amid declining revenue.

The company, which owns 21 FM and 2 AM stations and is selling its TV stations, reported a $1.9 million loss compared with earnings of $6.5 a year ago.

Revenue fell 3% to $87.3 million, though the company said international radio net revenue rose 28% to $8.2 million. Besides radio stations in Los Angeles, New York, Austin, Chicago, Indianapolis, St. Louis and Terre Haute, Ind., Emmis owns five stations in Hungary, Belgium, Bulgaria and Slovakia.

The company said Tuesday that it has sold all but one of its 16 TV stations.

Emmis, which also warned of a tepid current quarter, saw its shares fall 4.1% on Tuesday to $8.76. They have traded between $7.63-$15.13 during the past 52 weeks.

While radio revenue, which accounts for the bulk of the company's sales, fell 5.5% overall, publishing revenue rose 6%. Emmis owns several magazines, including Los Angeles Magazine, Texas Monthly and Country Sampler.

"As expected, weakness in our radio division persisted, and we will continue to face challenges as we look for the changes we've implemented in our largest markets to gain momentum," chairman and CEO Jeff Smulyan said.

Goldman Sachs analyst Mark Wienkes reiterated his "buy" recommendation on the stock Tuesday because he expects shareholders either to receive a tender offer or equity distribution if stations in Los Angeles, New York or Chicago are sold.

Without a bid, though, "we still see a challenging revenue outlook and further fundamental deterioration, preventing any meaningful share appreciation," the analyst said.
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