With Portable People Meter (PPM) contracts in hand from his largest customers, Clear Channel and CBS Radio, as well as several other major radio groups, Arbitron CEO Steve Morris is ready to grow the company. In his quarterly conference call with analysts, Morris indicated that Arbitron is on the prowl for acquisitions. Not just the smaller tuck-in acquisitions that it has made since its separation from Ceridian, but bigger buys – acquisitions that would expand Arbitron beyond audience measurement, but still within the general field of research. What does he have up his sleeve? Stay tuned.
Morris can move in this direction now because Arbitron has a clear path for growth in revenue and profits from its main business, radio ratings. 2007 is being positioned as a "trough year" for earnings because of the cost of the PPM rollout, as well as costs associated with Project Apollo, the national research project to link PPM data across multiple media to consumer buying patterns. Arbitron's advertiser and agency partners in Apollo will soon be deciding whether to commit big bucks to carry forward beyond the experimental phase. As for PPM, the revenues are going to come in on a predictable basis as the roll-out to the top 50 markets continues. With more clarity about the path ahead, Arbitron officials yesterday confirmed their previous guidance that revenues will be up 5.5-7.5% for all of 2007, which would be 347.4-353.9 million bucks. They also tightened the earnings per share projection for this year, from the previous 1.30-1.50 per share to a range of 1.35-1.45.