Entercom reported that Q2 revenues were down 1% to $104.7 million. CEO David Field isn’t looking for Q3 market conditions to be any better, so he’s focused on the company’s balance sheet and using free cash flow to pay down debt.
Operating costs were up 4% to $71 million in Q2, so station operating income was down 11% to $33.6 million. Free cash flow was off 14% to $22.7 million.
“Entercom’s results weakened slightly in the second quarter as revenues were impacted by sluggish economic conditions. While we do not anticipate improvement in third quarter market conditions, we continue to enhance our value to customers by developing our integrated, multi-platform marketing capabilities and leveraging the power of radio’s near universal reach and our strong local brands and personalities. In addition, we continue to benefit from the strong cash flow generation of our business model which has allowed us to significantly reduce our debt,” said Field in announcing the Q2 results.
“There is clearly some momentum driving auto,” said Field when asked in Q&A about the sector. However, Entercom does not provide formal guidance. And, like everyone else, Field was unable to predict the fallout from the day’s Wall Street reaction to the unprecedented downgrade of US debt by S&P.