Arbitron profits beat Wall Street expectations


Q2 earnings per share for Arbitron were 14 cents, thumping the Thompson First Call consensus of Wall Street analysts by four cents. Revenues were up only 1.8% to $88.3 million, but that marked a rebound from the revenue decline reported for Q1.

The Q1 revenue decline, which still translated in a decline of 0.6% for the first half of 2010 to $184.2 million, had been blamed on Univision’s refusal to subscribe to the Portable People Meter (PPM) service in most markets and for Cumulus and Clear Channel moving some of their small markets to Nielsen’s sticker diary service. Despite Arbitron’s settlement with the PPM Coalition over how to improve measurement of minority audiences, Univision has still not signed a new PPM contract, although Arbitron CFO and Exec. VP US Media Services Sean Creamer noted that negotiations are continuing.

Q2 EBITDA increased 6.4% to $12.9 million and EBITDA for the first half rose 12.5% to $37.4 million.

CEO Bill Kerr called the agreement with the PPM Coalition an important achievement. “This agreement helps us to refocus resources across the company on matters of importance to our core customers, including our continued efforts on sample quality across all key metrics and further enhancements to the value and utility of our existing services and our work on new cross-platform services that we plan to help fuel our long-term growth,” Kerr said. He noted continued improvement in sample quality during Q2 for both PPM and Arbitron’s diary service.

In Q&A, analyst Jim Boyle of Gilford Securities noted the recent accreditation by the Media Rating Council (MRC) of Nielsen’s Local People Meter (LPM) in 15 new markets, marking the accreditation of the TV ratings service in all 25 markets where it has been implemented. Does that bode well for Arbitron getting PPM accredited by the MRC in more than the current three markets?

“I think what it is very much indicative of is that accreditation is a process and at some point there is a tipping point, if you will – and it appears that was reached with Nielsen,” Creamer said. “To the extent that applies to us at some point, that would be great as well. All I can say is we are committed to working through and taking the time it takes. Now, if you look at the time line, that was a big traunch of [LPM] markets that got accredited. I’m sure Nielsen is thrilled with that outcome. It took them a long time. And if you compare schedules, we certainly are not behind them in that time line in terms of getting our accreditation done.”

RBR-TVBR observation: Not that we (or most people in radio) ever had much direct contact with his predecessor, but Bill Kerr seems to have improved the atmosphere at Arbitron – for both the staff and its clients. Settling the dispute with the PPM Coalition removed a dark cloud over the company. Now, if only it can get PPM accredited in some more markets.