The advertising recovery for its clients and completion of its Portable People Meter (PPM) roll-out are paying off big-time for Arbitron. Revenues and EBITDA (earnings before interest, taxes, depreciation and amortization) were up sharply in Q2 for the ratings company.
Revenues were up 8.4% to $95.7 million, primarily because the final 15 PPM markets were commercialized in the second half of 2010 and are now producing revenues. Also, Arbitron got long-time PPM hold-out Univision Radio back as a client in November 2010.
EBITDA shot up 52.5% to $19.7%. Arbitron noted that its EBITDA margin increased to 20.6% from 14.6% a year earlier.
Net income ballooned 99.6% to $7.6 million. Earnings per share were 27 cents, up from 14 cents a year earlier.
Ahead of his quarterly conference call with Wall Street analysts, CEO Bill Kerr had this to say about Q2:
“In the second quarter, Starcom MediaVest and ZenithOptimedia signed a multi-year contract renewal for radio ratings and software. These two agencies are part of Publicis Groupe, one of the largest brand communications organizations in the world. The renewal covers eight affiliated agencies, which, in the aggregate, place hundreds of millions of ad dollars on local and national radio outlets.
“In our cross-platform efforts, we recently signed a leading broadcaster to a cross-platform study of audiences to its radio and television outlets in a top-ten market. We continue to see strong interest in our cross-platform initiatives and believe this new contract shows we are moving in the right direction.
“We’ve also made good progress during the first half of the year on the development of a total audience measurement service, combining both over-the-air and Internet audio listening. This planned new service would be the first combined audience measurement of both over-the-air radio audiences and Internet audio audiences with the latter based on server-side metrics for streamed radio broadcasts and pure-play Internet audio programming. The market has shown significant interest in this new service and we anticipate our digital radio service, when launched, will address an important market need for a total audience measurement service.
“Finally, we continue to work on improving margins in our radio ratings business and those efforts paid off with higher EBIT and EBITDA margins in the first half of 2011 compared to 2010. Because we have fully commercialized the PPM service in all 48 planned markets, we also anticipate finishing the full year at higher EBIT and EBITDA margins than 2010 as revenue continues to benefit from phase-in of contracted PPM price increases while the costs associated with commercializing PPM markets are behind us.”
In the confernce call itself, Kerr provided no new pacing information about the second half of 2010, but reiterated the company’s previous guidance that full year revenue growth is expected to be in a range of 6-8%.
