AMCN Airmedia Grp. ADS, Each Representing Two Ordinary Shares (MM)

Lamar Advertising Co. (LAMR) reported net income of $7.2 million or 8 cents per share in fourth quarter 2012 compared with $6.4 million or 7 cents per share in the year-earlier quarter. Although earnings in the reported quarter increased year over year, it missed the Zacks Consensus Estimate by 3 cents.

For full year 2012, the company reported net income of $9.8 million or 10 cents per share versus $8.6 million or 9 cents per share in the previous year. Earnings for 2012 fell short of the Zacks Consensus Estimate by 4 cents.

Net revenues for the reported quarter increased 6.0% year over year to $305.5 million. This resulted in a considerable rise in operating income (39.2%) in fourth quarter 2012 compared with the year-ago period, despite relatively high operating expenses. For full year 2012, net revenues were $1.2 billion vis-à-vis $1.1 billion in the prior year, while operating income climbed to $217.7 million from $186.4 million in 2011.

Adjusted EBITDA for fourth quarter 2012 were $135.8 million versus $125.8 million in the year-ago quarter. For full year 2012, adjusted EBITDA aggregated $514.4 million compared with $487.1 million in the preceding year.

During the reported quarter, Lamar Advertising acquired the outdoor advertising subsidiary of NextMedia Group Inc., a leading media company, for $145 million in cash. The company funded the acquisition through a debt offering of $535 million of 5% senior subordinated notes due 2023, which resulted in net proceeds of approximately $527 million.

At year-end 2012, Lamar Advertising had a liquidity of $301.2 million, which included $242.3 million availability under its revolving senior credit facility and $58.9 million in cash and cash equivalents. Total debt, including current maturities, was relatively stable at $2.2 billion.

Free cash flow in the reported quarter was $71.9 million compared with $63.9 million in the year-ago quarter. For full year 2012, free cash flow increased 19.0% year over year to $267.5 million.

For the first quarter of 2013, management expects net revenue within the $282-$285 million range. We remain bullish about the long-term prospects of the company.

However, Lamar Advertising should remain wary of stiff competition from other players in the industry such as Clear Channel Outdoor Holdings Inc. (CCO), Publicis Groupe SA (PUBGY), and AirMedia Group Inc. (AMCN). Lamar Advertising currently has a Zacks Rank #3 (Hold).

 
AIRMEDIA GP-ADR (AMCN): Free Stock Analysis Report
 
CLEAR CHANL OUT (CCO): Free Stock Analysis Report
 
LAMAR ADVER CO (LAMR): Free Stock Analysis Report
 
PUBLICIS GP-ADR (PUBGY): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research