Radio revenue reports foreboding


After looking at early numbers posted by Emmis and Cox Radio, Wachovia Capital Markets analyst Marci Ryvicker has lowered her 2009 estimates for Cox. Also, she’s putting all of her broadcasting estimates under review.

Ryvicker says the preliminary Q1 results from Cox Radio were weaker than she had expected. “Q1 revenue was down 23% ($75.5m), well below our -14% ($84.4m) forecast and the pacing data of -20% that mgmt provided on CXR’s last conference call (March 4th).  Operating expenses were -5% compared to our -1% est, resulting in EBITDA of $10.6m (-62%) vs. our $17.4m (-38%) forecast.  The only other information provided was interest expense of $1.3m vs. our $3.4m estimate,” the analyst said in a note to clients.

“Given the Q1 preliminary results, combined with weak Q2 (-28%) and Q3 (-35%) pacings, we are adjusting our Q1 and 2009 estimates.  We are reducing our Q1 rev, EBITDA and FCF/share estimates by 10.5%, 38.5% and $0.05, respectively.  Furthermore, given the 2009 forecast provided in the release, we are reducing our ’09 revenue, EBITDA and EPS estimates to $341.7m (-17%), $72.4m (-45%) and $0.45, vs. our prior estimates of $364.8m (-11%), $86.8m (-34%) and $0.46,” Ryvicker said of Cox Radio.

Emmis had reported its fiscal Q4 results (December-February) a few days earlier – and those were also below Ryvicker’s expectations. “FQ4 domestic revenue declined 23%, excluding national rep guarantee, compared to our -13% forecast and mgmt’s pacing data (provided January 9th) of -20%.  Mgmt also stated that March finished down 26%, while April and May were pacing down 32% and 37%, respectively.  In our opinion, this data is incrementally negative and leads us to believe that the local ad environment continues to deteriorate,” the analyst said.

“Given the significant weakness that both EMMS and CXR are experiencing, combined with what we are hearing from our industry contacts, our broadcast estimates are currently under review,” Ryvicker concluded.

RBR/TVBR observation: The numbers are what they are. Don’t blame the analyst. There has to be a bottom somewhere. But where?