Arbitron’s Q1 net income was $12.3 million, or $0.46 per share, compared with $16.3 million, or $0.57 per share, for Q1 of 2008. Excluding the $8.2 million pre-tax impact of the previously disclosed restructuring charge, earnings per share for the quarter were $0.65 per share. However, for Q1, the company reported revenue of $98.5 million, an increase of 4.7% over revenue of $94.1 million during Q1 2008.
Costs and expenses for the quarter increased by 19.1%, from $63.3 million in 2008 to $75.4 million in 2009, due to planned expenditures for the PPM ratings panels, the planned introduction of cell-phone-only household sampling in diary markets and expenses of $8.2 million related principally to severance and benefits for the reorganization and restructuring program announced in March 2009.
Said Michael Skarzynski, Arbitron CEO: “During the first quarter of 2009, Arbitron focused its efforts in four areas: customer satisfaction, service quality, cost management and strategic positioning.”
He noted that the company is currently recruiting thousands of PPM survey participants for the new 19 markets they plan to commercialize in 2009. “While the scheduled commercialization…is ambitious, we have years of research and testing with the PPM service under our belts. We have also learned lessons from commercializing the first 14 PPM markets.”
At the end of February Skarzynski said Arbitron extended to all PPM markets nationwide, key enhancements that were part of their agreements with the NY, MD and MD Attorneys General. “These include expanding cell-phone only sampling and increases in compliance rates, response measures and other key metrics. As part of our continuous improvement program, Arbitron is meeting with our customers and asking for specific suggestions on improving our PPM and Diary services.”
Regarding the new competitor in small markets—Nielsen—Skarzynski said they are not backing down and are digging in for the fight: “We are moving to enhance our competitive position in the medium and small markets. Nielsen has entered the small diary market. We take seriously Nielsen’s entry into Arbitron’s core business. We intend to remain in the diary market and make continuous improvements to our diary service in order to maintain our leadership position. We plan to measure radio audiences in all of the competitive markets that are part of our current lineup.”
Arbitron is reiterating its revenue and EPS guidance for 2009. For the FY, Arbitron expects revenue to increase between 6% and 10% compared to the 2008 revenue of $368.8 million. Earnings per share guidance for 2009 includes the impact of the previously disclosed pre-tax expense of $8.2 million, related to the restructuring program. As a result of these initiatives, Arbitron expects to realize net savings during the last three quarter of 2009 approximately equivalent to the first quarter 2009 restructuring expense.
Meanwhile, Clear Channel is quietly saying a new deal with Arbitron has not been done. In fact, it may be off the table altogether.
RBR/TVBR observation: Right this second neither Arbitron nor Nielsen have demonstrated any form of leadership in getting to the day to day broadcaster on the advantages of using their service. So we hear the words, Vow to Fight. Right now we see no fight we do not even see a pushing match, yet.
Neither is truly marketing to the broadcasters their advantage of using their services. First one that gets out in front will get the attention of radio, agency, and broadcasters so both companies don’t just think you can expect participation because of your name brands.
As for Clear Channel on their hush new Arbitron deal this is nothing new. Clear Channel signed with Nielsen and we have seen this pattern before to use a new competitor or now in this case Nielsen’s brand to negotiate a new and lower deal with Aribtron. Recommendation: Do not follow Clear Channel’s lead. Again, Nielsen and Aribtron have to establish their unique benefits to the broadcaster and agencies why they are best to serve the radio medium today and for the next decade.