Cox Radio’s Q3 net revenues were 111.8 million, down 0.8% from Q3 2006. Local revenues decreased 0.9% and national revenues decreased 5.2%, each as compared to Q3 2006. Other revenues increased 13.1% as compared to Q3 of 2006, primarily due to a 19.7% increase in Internet revenues during the comparable period. Stations in Atlanta, Birmingham and Greenville delivered revenue growth in the quarter, while stations in Miami, Tampa, San Antonio, Jacksonville, Houston and Dayton were down. Revenues in Atlanta, CXR’s market, were up 8.7% in the quarter.
Net income in Q3 was 20.2 million, a decrease of 3.8 million from Q3 2006.
Net revenues for the first nine months of the year increased 3.1 million to $330.5 million, a 0.9% increase compared to the first nine months of 2006. Local revenues increased 1.2% and national revenues decreased 2.6%, each as compared to the first nine months of 2006.
Goldman, Sachs’ Mark Wienkes’ analysis said CXR’s Q3 revenue performance appears in line to slightly better than the industry, "though any acceleration in Q4 is unlikely in our view, given softening industry pacings of down low-mid single digits in Q4…We continue to think Cox Enterprises remains less than likely to bid for Cox Radio in the near-term, particularly with larger market station valuations compressing and minimal buyback activity."
Bank of America’s Jonathan Jacoby noted that Q3 revenue decline of -0.8% missed their estimate for 0.5% revenue growth. Revenue of 111.8M missed their estimate by 1.5M "as radio industry continues to be weak (down 2% in Q3).
On the PPM issue in Houston, CXR CEO Bob Neil noted some good and bad news. "Houston was one of the weaker markets this quarter, and was where PPM was introduced. We’re certainly fortunate that our formats in Houston are PPM-friendly, and while we certainly adjusted our programming and marketing to that methodology, we’re pleased to report to you that the most recent month had all of our entities in Houston in the Top 10."That included two stations that were not in the Top 10 previous to the PPM introduction there.
Looking ahead to Q4, Neil said the quarter is currently pacing flat. October looks to finish up; November is currently pacing down; December is pacing flat.