After digesting the better than expected Q4 results and Q1 guidance from LIN TV, Wells Fargo Securities analyst Marci Ryvicker raised her estimates for the company. She did, however, maintain her “Market Perform” rating on the stock.
“Revenues and EBITDA came in above forecasts and guidance due to better political ($7M vs. our $3.5M) and core advertising with local +7% and national +12% vs. our +2% and +1%, respectively. Expenses were generally in line, -7.7% vs. our -7.1%. Auto was +11% and continues to be on fire, +60% YTD, with domestic +100+% and foreign +58%. Other positive categories in Q4 were health/beauty & medical. FCF/share and EPS were $0.33 and $0.25 (excl. impairment charge) vs. our $0.19 and $0.09 due primarily to higher EBITDA,” Ryvicker told clients after comparing the Q4 results to her expectations.
“Management is guiding Q1 rev up 21-25% vs. our +19%. Granted, this forecast includes RMM (~300bps) and Olympic/Super Bowl (~200bps). We had modeled roughly $2.5M in Olympics/Super Bowl (vs. the $2M stated on today’s call) but had not included RMM – so apples-to-apples, Q1 guidance of +18-21% was essentially in line. Expense guidance was better than expected – with Q1 expenses slightly down excluding RMM and +2-5% including RMM – we were +7%,” the analyst noted.
So, she has raised her Q1 reveue estimate to $91.3 million from $88.7 million and boosted her estimate of earnings per share (EPS) to seven cents from two cents. That’s still below the company’s guidance of 8-10 cents.
For all of 2010 Ryvicker is now expecting revenues EPS of 87 cents, up from her previous estimate of 74 cents. Her valuation of LIN’s stock is now $6-7, up from $4-5. It had closed at $6.71 Thursday before she issued the new report on Friday.