[UPDATE: Gilford Securities analyst Jim Boyle takes issue with our headline. He says Arbitron’s Q3 results included four cents per share of non-cash one-time charges, so the effective EPS was 55 cents and beat the consensus by two cents. That four cent charge was mentioned in the company’s quarterly earnings release, but not in the section where the EPS figure for Q3 was presented, so RBR-TVBR and other news outlets reported it as a miss.]
Q3 earnings per share (EPS) of 51 cents were two cents below what Wall Street analysts, on average, had been expecting from Arbitron. The company reiterated its EPS guidance for full year 2009, but officials indicated there was no way to know when the economic recession would end and prospects for the radio industry improve.
For all of 2009, Arbitron is still expecting EPS of $1.40-1.55, up from $1.36 for 2009. Despite the fact that only one quarter remains, company officials refused to discuss that guidance in quarterly terms. Arbitron is projecting that revenues will be up 2-6% for the year.
For Q3, revenues were down 4.3% to $98.1 million.
“Lower revenue during the current quarter compared to the third quarter of last year is largely the result of several previously disclosed factors, including: the impact of a decision by Cumulus and Clear Channel to subscribe to a competitor’s diary-based radio ratings service in a limited number of small and medium sized markets, beginning with the Spring 2009 survey period; the impact of Univision electing not to subscribe to the Portable People Meter (PPM) service in certain markets; and the continued impact of the advertising recession on renewals and new business,” Arbitron said in its quarterly announcement.
“Comparability between the 2008 and 2009 third quarters is also affected by the previously disclosed impact of the transition of our services from diary to PPM. During the first quarter of PPM commercialization, Arbitron recognizes revenue based on the delivery of both the final quarterly diary ratings and the initial monthly PPM ratings in each market. This impact was pronounced in the third quarter of 2008 – during which the Company commercialized the PPM service in eight large markets, including New York, Los Angeles, Chicago, and San Francisco,” the company added.
Earnings before interest and income tax expense (EBIT) for Q3 were $22.7 million, down 19.5% from a year ago.