Double-digit growth for Arbitron


Arbitron reported that Q4 revenues were up 10% to $111.7 million, owing largely to the completion of the Portable People Meter (PPM) rollout to all 48 markets. That gave a bigger boost to EBITDA and the company is looking for continued growth in 2011, since business is improving for its radio clients and it no longer has any markets where it is funding both diary and PPM service at the same time.

With reduced costs – not only from corporate efficiencies, but also reduced legal expenses now that PPM disputes have been settled – EBITDA shot up 66.3% in Q4 to $32.8 million.

For full year 20010 revenues rose 2.7% to $395.4 million and EBITDA gained 16.8% to $100.3 million.

CEO Bill Kerr, pictured, noted that the company has been able to drive profits while raising performance benchmarks for PPM and adding such enhancements as in-person recruitment of panelists. “We also continue to make progress in the sample quality of our diary-based radio ratings service, particularly among the difficult-to-recruit 18-34-year-old demographic. In addition, we made important strides in laying the groundwork for greater partnership with our customers. Sean [Creamer] and I have spent much of this year on the road meeting with customers and listening to their concerns. We believe 2010 contract signings with Univision and Spanish Broadcasting and the early renewal of Clear Channel are reflective of that outreach,” the CEO told analysts.

Kerr introduced CFO-to-be Richard Surratt, brought onboard this month as Executive Vice President, Finance. He will be taking over as CFO once the company’s 10-K for 2010 is filed with the SEC, freeing Sean Creamer to devote his full attention to his duties as Executive Vice President, US Media Services.

Creamer reiterated the company’s previous guidance that Arbitron’s revenues are expected to grow 6-8% in 2011, noting that most observers expect radio industry ad revenues to grow in the low single digits. Arbitron, he noted, is growing revenues faster than costs now that the PPM rollout is finished.

Creamer played down the significance for The Nielsen Company dropping its US radio ratings service, telling analysts that Arbitron’s ability to raise prices is driven more by the health of the radio business than Nielsen’s exit.

Nonetheless, Arbitron’s stock price had been up 40% in the two months since the Nielsen announcement, prompting Gilford Securities analyst Jim Boyle to drop his rating on the stock to “hold,” based strictly on valuation.