Analyst raises Saga estimates

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Wells Fargo Securities analyst Marci Ryvicker liked what she heard in the quarterly conference call by Saga Communications CEO Ed Christian and CFO Sam Bush. The analyst has now raised her estimates for Saga in Q1 and all of 2010.


“Saga reported stronger-than-expected Q4 results in both radio and television. Similar to Q3, the beat was primarily in revenue as expenses were in line,” Ryvicker told clients.

On a percentage basis, her increased estimates for Q1 are modest, but building to bigger gains over the course of the year. For Q1 the analyst is looking for total revenues of $27.5 million, up slightly from her previous estimate of $27.4 million and still around 5%, but for the full year she expects revenues to be up 7%, rather than 6%, to $128.7 million. TV revenue is still expected to be up 5% in Q1 to $3.6, but up 9%, rather than 8%, for the year to $17.7 million. The much larger radio division is now expected to see revenues of $23.9 million in Q1, up from the previous estimate of $23.8 million (but still about 5%), with full year revenues put at $111 million, rather than $110 million, which still works out to around 6%.

Those increases in revenues, along with cost savings, should result in significantly higher gains in station operating income (SOI). For Q1 Ryvicker is looking for radio SOI to shoot up 31.3%, rather than 19.4%, to $5.1 million, with full year SOI up 15.6%, rather than 14.2%, to $35.1 million. For TV, the analyst says Q1 SOI should be up 36.5%, rather than 23.9%, to $0.6 million, with the full year 2010 up30.7%, rather than 24.5%, to $5.5 million.

Looking further ahead, Ryvicker’s first projection for 2011 is that Saga will record another year of revenue growth, gaining 1% in the non-election year to $130.3 million.


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