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Clear Channel profit rises 70% on gain
By David B. Wilkerson, MarketWatch
Last update: 4:23 p.m. EDT May 9, 2008
CHICAGO (MarketWatch) -- Radio behemoth Clear Channel Communications Inc. said Friday that its first-quarter profit jumped 70% on a gain related to the sale of a South African outdoor advertising firm, but radio revenue remains on a downward spiral as a weak advertising environment weighs on the industry.
Clear Channel (CCU) , whose plans to go private are stalled in litigation, said it earned $161.4 million, or 32 cents a share, in the first quarter, compared with $95.1 million, or 19 cents a share, in the year-earlier period.
Excluding a gain related to the divestiture of its 50% stake in Clear Channel Independent, as well as discontinued operations including television stations and many radio stations that were sold, the company would have earned $94.2 million, or 19 cents a share, in the latest three months.
Revenue rose 4% to $1.6 billion.
Analysts polled by FactSet Research were expecting a profit of 21 cents a share on revenue of $1.57 billion.
Clear Channel shares rose 16 cents to close at $30.
The company has agreed to a $39.20-a-share buyout from Thomas H. Lee Partners and Bain Capital. The deal, valued at about $19 billion, comes with a breakup fee of $500 million to $600 million, depending on the circumstances.
But earlier this year, when several banks that had promised to provide the deal funding wanted to back out, Clear Channel and the private-equity firms filed a lawsuit against them. A trial date has been set for June 2.
Radio revenue at Clear Channel fell 4% from the first quarter of 2007, to $769.6 million, while outdoor ad sales jumped 12% to $775.6 million.
"While our results were affected by the soft advertising market, we continued to out-deliver the majority of our media industry peers," said Mark Mays, chief executive of Clear Channel.
In the second quarter, Clear Channel expects radio ad sales to decline 5.3% compared with the year-ago June quarter. Ad sales are on pace to drop 4.3% in 2008. End of Story