10-26-2012
NOTE: THIS STORY WAS UPDATED AT 11am FRIDAY
Entercom scrapped out a 2% gain in Q2 of 2012. After starting out strong in July, August and September softened and political revenue is not coming in to radio as originally hoped. Entercom CEO David Field said, "we don't have a definitive answer why business softened." He did say Q4 looks better, pacing up 6% so far.
Entercom cut another 9% from the expense line which helped produce a 25% jump in operating income ($38.7 million). Free cash flow was flat at $20.6 million. The 2% gain may be an indication of a still uncertain consumer and confirmation that radio is not benefiting from political spending as it had hoped, and as much as Television is.
NOTE: THIS STORY WAS UPDATED AT 8am FRIDAY
We'll get more detail at 10AM on the company conference call but, at first glance, it was another so-so quarter of revenue for Entercom, gaining only 2%. In addition Entercom cut another 9% from the expense line which helped produce a 25% jump in operating income ($38.7 million). Free cash flow was flat at $20.6 million. The 2% gain may be an indication of a still uncertain consumer and confirmation that radio is not benefiting from political spending as it had hoped, and as much as Television is.
5AM
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David Field will report 3rd quarter earnings on a 10AM conference call Friday. It'll be our first real look at whether a few of the bigger markets are really turning the corner and can produce significant top-line revenue gains in the radio industry. Entercom has over 100 stations in 23 markets including San Francisco (#4), Boston (#10), Seattle (#13) and Denver (#20). TV has been booming thanks to politics.If you believe the political pundits, Colorado, Wisconsin, Virginia and Florida are swing states and Entercom operates radio stations in all four of those states.
In August Field told investors he expected to see more top-line growth in the back half of the year as format changes started to take hold in several markets. In the second quarter of this year, Entercom reported flat local revenue. Overall the company was down 1% in Q2. Operating income was up but that was largely due to cost cutting. We should also get a clearer picture on political advertising. In 2008 Entercom took in roughly $8 million in political advertising and Field told investors last quarter that any revenue that would be coming to Entercom would mostly take place in Q3 and Q4.
Be sure to follow us on Twitter during the conference call for live updates @radio_ink
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