Clear Channel, which accounts for about 20% of total U.S. radio advertising, reported a $16.7 billion first-quarter loss, including a previously announced $17 billion goodwill writeoff. But excluding that, it reported a strong $90.3 million profit or 15 cents per diluted share, better than forecasts. Reported revenue rose 4% to $1.7 billion from $1.6 billion last year, boosted by a 2.4% rise in pro forma revenue from radio-its largest unit-to $782.8 million, in part from increased advertising from marketers including Cingular Wireless, Sony Corp. and Diageo's Burger King Corp.
Despite a slow February resulting from reduced TV-program tune-in advertising due to the Olympics, March improved and the second quarter looks better, Clear Channel President-CEO Mark Mays told analysts. "We tend to have a positive momentum," he said, predicting low- to mid-single digit radio growth this quarter.
Rival radio syndicator Westwood One, partly owned by radio powerhouse Viacom, nearly tripled first-quarter income to $17.4 million or 16 cents per diluted share, from $4.6 million or 4 cents. Revenue rose 4% to $126.3 million from $121.6 million, due to its broadcast of the Olympics. "We continue to see improvements in the advertising marketplace," Westwood President-CEO Joel Hollander told analysts. "We are now in the midst of three positive months-April, May and June-for the first time in quite some time."
Analysts forecast 3% to 6% industry growth in the second quarter and 4% to 5% for the year.
Radio Advertising Bureau President-CEO Gary Fries echoed that optimism, citing an April increase in radio revenue in the New York market. "Major markets are now rebounding, and that could mean some pretty dramatic improvements," he said.
But Mr. Fries remains cautious. "Things fell apart fast and things are coming back more quickly than I thought," he said, "and things are still very fragile."
Clear Channel Comm.
Net loss: $16.7 billion
Revenue: $1.7 billion
Revenue from radio: $782.8 million
Net income: $17.4 million
Revenue: $126.3 million