Q4 was up for Arbitron, but issues remain


Arbitron reported that Q4 reveues rose 8.5% to $101.5 million and income rose as well. But with the future status of revenues from Univision and SBS in doubt, the company’s broad guidance for 2010 spooked investors and sent its shares lower on Thursday.

Along with the revenue increase, due primarily to commercializing more Portable People Meter (PPM) markets – 33 thus far – earnings before interest and and income tax expense (EBIT) jumped 95.8% to $13.2 million from $6.7 million in Q4 2008, when the PPM rolout was at a much earlier stage.

For 2010, Arbitron is telling Wall Street to expect revenues to be up 2-6% over the $385 million booked in 2009. CFO Sean Creamer was upbeat on the improving ad marketplace for the company’s radio customers, saying “the worst is hopefully behind us.” A recovery for radio could bring back some smaller market stations which have dropped radio ratings subscriptions and improve the market for ancillary products.

But with Univision refusing to subscribe to PPM (or to encode for it), except in Houston, and SBS withholding payments as the companies battle in court, Creamer told analysts that the impact from the lack of revenues from those Spanish radio companies “could be significant” in 2010.

“We expect all of out customers to honor the terms of their agreements and intend to take appropriate action to ensure the integrity and completeness of the radio advertising buy-sell process. It is our goal to responsibly resolve both of these matters,” Creamer said of the disputes with the two Spanish radio companies. In the meantime, though, the company’s guidance is broad because of the uncertainty.

Creamer also disclosed that Arbitron has been in a dispute with its insurance carrier over costs related to PPM subpoenaes, although it has been settled without litigation. The insurer had claimed that its coverage was only for Arbitron’s officers, not the company itself, while the company insisted that all were covered. To avoid the cost of litigation, Creamer reported that Arbitron settled the $4.4 million claim for $3.1 million.