Another Challenging Q3, This Time From iHeart


The nation’s biggest radio broadcasting company on Wednesday morning released its Q3 results. While the iHeartMedia segment of iHeartMedia Inc. extended its year-over-year revenue growth to 18 consecutive quarters, consolidated revenue decreased 1.9% and operating income slid by 23.7% in the three month period ending Sept. 30.

“We continue to be committed to balancing financial discipline with investments in data, programmatic and attribution to grow our businesses while staying focused on improving our capital structure,” COO/CFO Rich Bressler said ahead of the company’s earnings call to review and discuss its Q3 results.

Consolidated revenue moved from $1.57 billion to $1.54 billion — the 1.9% dip.

At the same time, consolidated direct operating and SG&A expenses grew by 4.6%, to $1.06 billion.

But the large dip in consolidated operating income is what many on Wall Street will likely focus their attention on: It fell to $228.31 million, from $299.35 million.

Is there one main culprit for this dip?  While operating income for iHeartMedia fell by 16.8%, to $247.97 million from $298.13 million, the quarter includes corporate depreciation and amortization of $7.8 million and $9 million for Q3 2017 and Q3 2016, respectively. Intercompany charges are also factored in to the consolidated operating income decline.

Thus, iHeartMedia Inc.’s Q3 net loss widened to $248.18 million, from $35 million.

Meanwhile, iHeart has a lot less cash on hand, with $286.4 million available at the end of Q3 2017, compared to $845 million on New Year’s Eve 2016.

Then, there’s iHeart’s much-discussed long-term debt. It grew to $20.62 billion as of Sept. 30, from $20.37 billion as of Dec. 31, 2016.

OIBDAN is a measure used by iHeart, and in the core iHeartMedia division it declined to $306.06 million, from $358.82 million, during Q3.

What lies ahead for iHeart? “Our current forecast indicates we will continue to incur net losses and generate negative cash flows from operating activities as a result of our indebtedness and significant related interest expense,” the company notes.

Even so, iHeart Chairman/CEO Bob Pittman struck a positive tone in his pre-call comments. “As a true multi-platform, 21st-century media company, we continue to expand the innovative ways for us to engage consumers and to reinvent how we do business with our advertising and marketing partners. At our iHeartMedia business, in addition to building out a data-first programmatic advertising platform, we are continually growing our content offerings.”

Pittman was absent from the Q3 conference call with investors.

On a positive note, iHeart’s core iHeartMedia arm experienced statisically flat revenue of $859.53. Yes, it is up from $857.1 million, but this is a 0.3% gain. As noted above, operating income for the division that includes the AM and FM stations owned by iHeart fell 16.8%. Expenses surged 11.1%, to $553.47 million.

The company’s quarterly earnings call was not attended by Pittman and largely featured Bressler, in promotion mode touting iHeart’s reach. For more, click here.


In related iHeartMedia news, the company today reached a new multi-year agreement with Nielsen Audio for radio ratings services for all Portable People Meter (PPM) and diary-measured markets.

This multi-year agreement provides Nielsen’s radio ratings services for all iHeartMedia radio stations across its more than 150 local markets.

The agreement also includes the use of Nielsen data and services for Katz Media Group, Premiere Radio Network and Total Traffic & Weather Network.