Key analyst pulls back a bit on Q4 expectations


No Wall Street stock analyst has more radio and TV companies in their coverage portfolio than Marci Ryvicker at Wells Fargo Securities, so it is significant when she revises her outlook. She’s become a bit more cautious about Q4 revenues, although she says TV is holding up better than other media.

“From our checks, it sounds like Q3 ended better than the stock market would have led us to believe – particularly the month of August, which showed relatively strong rev growth for radio and TV, while stocks were down ~10.0% (v. the S&P, -5.3%).

Auto has finally improved post-tsunami, which is really helping television; however, other ad categories are spotty. We feel confident that this is not another 2008/2009, but our checks indicate that advertisers have become more cautious as of late and visibility is more limited. Such caution is likely to last into 2012,” Ryvicker wrote in a note to clients. “As a result, we took down our core revenue growth estimates for most groups in Q4 and 2012 (less for TV versus other media).”

The bottom line, she added, “TV is holding up better than other media, and we see catalysts via political, auto and retrans in ’12.”

Because this is a political off year nearly all radio and TV companies are expected to post Q4 revenue declines from 2010.

In Radio Ryvicker is expecting Q4 revenues to be down 3.7%, rather than her previous estimate of 2.5%, for Entercom, with core revenues (excluding political) down 0.5%. She is holding steady with her expectation that Saga’s revenues will be down 3.1%.

For CBS Corporation, whose revenues are driven more by the CBS Network than its local TV and radio stations, Ryvicker has increased her Q4 expectation and is now projecting that revenues will be up 0.4%, rather than 0.2%.

For Belo she is expecting revenues to be down 13.1%, rather than 12.2%, with core spot growth (ex. political) of 2.6%. Her Gray TV forecast is little changed, to a decline of 25.8% from 25.7%, with core spot flat.

Sinclair is projected by Ryvicker to post a Q4 revenue decline of 7.4%, rather than 7.1%, with core up 0.8%. And for LIN Media she is expecting Q4 revenues to be down 6.9%, rather than 5.8%, with core spot up 2.7%.

RBR-TVBR observation: Ryvicker notes that nothing in her analysis should be a surprise to anyone who follows the sector. The stock prices, she says, already reflect a slowdown, as RBR-TVBR readers saw in our quarterly report. So she repeated her view that Wall Street has cut TV stocks too deeply.

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