Radio receives chilly reception

Sector shares slip; video game stocks have solid Q2s

Radio investors experienced more pain on a busy Thursday for earnings reports, though media companies in general fared well.

Radio One, which owns or operates 60 stations, said it swung to a second-quarter loss on weak advertising.

The company reported a loss of $7.6 million, compared with a profit of $8.1 million a year ago on revenue that fell 6% to $86.1 million. The latest quarter also included an impairment charge of $15.9 million.

"Excluding our L.A. operations, we actually outperformed our markets slightly from a local revenue perspective," said Alfred Liggins III, CEO at Radio One. "Looking into the third quarter, we may be seeing some signs of improvement."

Competitor Emmis Communications was also off Thursday, to the tune of 2.8%, while other radio concerns, including the satellite variety, traded essentially flat.

Cable operator Charter Communications posted mixed results, narrowing its loss on higher revenue stemming from increased telephone and high-speed Internet service. The company, however, lost 29,300 basic-video subscribers, more than analysts expected, and the stock dropped 4.8% to $3.36.

Charter said it lost $360 million in the second quarter, compared with a loss of $383 million a year ago. Revenue was up 8.4% to $1.5 billion.

The highly leveraged company controlled by Microsoft co-founder Paul Allen added 60,300 high-speed Internet customers and 127,000 phone customers, exceeding Wall Street estimates on both fronts. But Charter, which has 5.3 million subscribers, added just 7,600 digital video customers in the quarter, below expectations.

World Wrestling Entertainment, whose shares have fallen since star wrestler Chris Benoit killed himself and his family in June, said Thursday that its second-quarter profit dropped 52% to $7 million on revenue that increased 15.3%, to $137.5 million.

Hurting WWE's results was a $15.7 million charge for the film "The Condemned" that starred wrestler "Stone Cold" Steve Austin. The film grossed just $7 million.

Still, WWE shares, which opened Thursday at a 52-week low, closed up 1.9% at $14.80.

On the video game front, Midway Games, controlled by Sumner Redstone, on Thursday posted a second-quarter loss of $14.3 million, compared with a $31 million loss a year ago. Revenue rose 23% to $31.8 million, more than Wall Street expected.

CEO David Zucker said that Midway benefited from such new games as "The Lord of the Rings Online: Shadows of Angmar" and "Mortal Kombat: Armageddon," and he is optimistic about upcoming releases "Stranglehold," "BlackSite: Area 51" and "Unreal Tournament 3."

Midway shares rose 1.9% to $5.95.

Activision fared even better. The publisher of "Shrek the Third," "Spider-Man 3" and "Guitar Hero II" reported fiscal first-quarter net income of $27.8 million, up from a loss of $18.3 million last year on revenue that surged 163% to $495.5 million.

Shares of Activision rose 5% to $18.30 during regular trading and kept going higher after hours when earnings were released.

Also after the bell, Take-Two Interactive Software disclosed that the release of its "Grand Theft Auto IV" game will be delayed until next year, missing the crucial Christmas shopping season. The late-day news sent shares plunging as much as 16% in after-hours trading.

And hefty first-quarter results reported after the bell Wednesday boosted shares of Electronic Arts. The world's biggest video game maker said its newest "Harry Potter" and "Sims" titles helped boost sales in a seasonally slow period.

While the company posted a net loss, it was less than Wall Street had expected, and sales that fell 4% to $395 million were also better than analysts predicted.

EA rose 7.2% to $51.56, making it the second-biggest gainer on The Hollywood Reporter Showbiz 50 stock index.

Dolby Laboratories, the index's biggest gainer, was up 13.4% after the company posted a blowout earnings report late Wednesday. The movie theater surround-sound company earned $29.7 million in its fiscal third quarter, up from $19.1 million last year on revenue that jumped 27.6% to $119.6 million.
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