The Federal Reserve Board left interest rates unchanged for the second time in over a year-a sign to Wall Street that the recession is at an end-and insiders say radio and TV ad sales are trending up (see story, P. 1).
Despite limited visibility due to advertisers booking broadcast time close to air dates, radio is seeing signs of recovery, said Ralph Guild, chairman-CEO of radio sales rep firm Interep National Radio Sales. Many radio ad categories-including movies, fast-food, restaurants, airlines, beer and wine-are pacing up in the first quarter, he said. Radio's three largest categories, retail, telecommunications and automotive, were up by single digits, 30% and 20%, respectively, in the first quarter of this year.
Interep reported a net loss of $19.9 million in 2001, more than six times 2000's loss of $3 million, and revenue down 5% to $101.8 million from $107 million a year earlier. Revenue from radio commissions, its core business, fell 19% to $80.4 million in 2001 from $99.8 million in 2000.
similar short term
Interep is forecasting flat to slightly higher revenue for 2002 and expects revenue growth to come not only from economic and advertising recovery, but also from a shift in ad dollars into radio from other media.
Among marketers, financial companies reported weak earnings and cautioned the outlook remains similar in the short term. The Goldman Sachs Group posted net revenue of $3.6 billion for the fiscal quarter ended Feb. 22, down 24% from the year-ago period, and net earnings of $524 million, down 32%. Lehman Brothers Holdings reported net revenue of $1.6 billion for the quarter ended Feb. 28, down 14%, and net income of $298 million, down 23%. Bear Stearns Cos. posted $1.24 billion in net revenue for the same fiscal quarter, up 2% from 2001, and $181 million in net income, up 9%. Morgan Stanley posted net revenue of $4.6 billion for the quarter ended Nov. 30, down 17% from a year ago, and net income of $870 million, down 28%.
General Mills blamed its results on disruptions from the acquisition of Pillsbury last year. Revenue rose to $3.1 billion from $1.7 billion for the quarter ended Feb. 24, thanks to Pillsbury's sales, but net earnings dropped to $82.5 million from $157.5 million in the year-ago period.
Chairman-CEO Steven Sanger told analysts results will improve as the Pillsbury transition wraps up in the fall and as new products and promotions help push demand.
contributing: cara b. dipasquale