Marci Ryvicker of Wells Fargo Securities says that the entire picture is muddled enough that her firm is staying “on the sidelines” as far as making firm predictions about the company’s performance in 2013.
That said, there is a lot to like about the way it has been handled.
For one thing, its numerous format flips are now starting to mature, bringing their results more in line with the radio industry as a whole. In fact, adding that fact in with JSAs in Florida and the acquisition of Buffalo Bills broadcast rights, Ryvicker believe the company is poised to outperform its peers.
On the expenses front, Ryvicker noted, “ETM’s focus on expense control really helps the bottom line. For the past three quarters, ETM has demonstrated station operating expense declines anywhere from -4% to -6% (excluding the $2M BMI refund), which has helped offset a somewhat anemic revenue environment.”
She notes that expenses will likely increase modestly in Q4, but it will be increasing in ways that also should increase its income.
Wells Fargo believes that Entercom may distribute dividends sometime in 2013, likely when it brings its leverage in the 4X range.