The investors have been rewarded with good returns over the last one year. Clear Channel is up by 48% on a 52 week basis. Over the longer term, the story is not good as the stock has declined significantly over the last five years. In the last two years, it has fallen by 40%. The crash in March 2012, has been majorly responsible for the recent bad performance. It had recovered till Q3'12 on back of growth in revenues and decline in losses. However, the last two quarters have not been very good. In Q4'12, the revenue went up significantly on a sequential basis, but the bottomline took a hit from impairments / debt extinguishment charges. In Q1'13 also, the performance was not good as the revenues remained flat on a yoy basis, and the net losses increased by nearly 68%. The stock has corrected from the 52 week high of $8.75, and seems to be a bit stable. Further growth in the stock will depend on improvement in fundamentals. While revenue growth is important, improvement in the bottomline is even more crucial. Outdoor advertising represents only a small percentage of the dollars spent on advertising in the United States, and even that is facing challenges from new concepts / internet advertising etc. The company has made efforts to promote outdoor advertising as an effective method to attract customers, but many advertisers are preferring social media / online advertising etc. Social media sponsorship companies like IZEA (IZEA) are using the power of celebrity influence to attract customers for the advertisers. Peers like Lamar (LAMR), JCDecaux and CBS (CBS) are formidable. So the company will face challenges, but its experience and penetration cannot be underestimated. It is quite possible that the company will make a comeback, and the stock will become stronger.
