DOW JONES NEWSWIRES
Clear Channel Outdoor Holdings Inc. (CCO) swung to a
first-quarter loss on a drop in revenue and a year-earlier gain as
parent company CC Media Holdings Inc. (CCMO) also swung to a loss
on year-ago income from discontinued operations.
Advertising woes that were first seen in newspapers and
magazines have been spreading to television and now to billboards,
which had been holding up well. Rival CBS Corp. (CBS) reported
Thursday that its billboard business, which had been its most
reliable growth area, swung to a loss and saw revenue slump
24%.
Paul J. Meyer, president and chief executive for the Americas
and Asia/Pacific, said Clear Channel Outdoor has scaled back its
digital-billboard deployment plan, especially in its smaller
markets, because of the economic downturn.
The billboard company posted a loss of $87.9 million, or 25
cents a share, compared with year-earlier income of $88.9 million,
or 25 cents a share. The latest results included $6.9 million in
restructuring charges, while the prior year's results included a
21-cent gain on the divestiture of its interest in a South African
outdoor-advertising company. Excluding items, last year's earnings
would have been 4 cents a share.
Revenue decreased 25% to $582.2 million. Excluding the effects
of foreign-currency translation, revenue would have fallen 17%.
Analysts polled by Thomson Reuters expected a loss of 18 cents a
share on revenue of $642 million.
Meyer said that like the fourth quarter, the sluggish U.S.
economy hurt nearly all the company's domestic markets in the
period. He added the company was able to reduce expenses more than
it expected and said Latin American and Canadian businesses
continued to be resilient.
Americas revenue fell 19% while international revenue slid
29%.
Meanwhile, CC Media Holdings, the vehicle used by private-equity
firms Bain Capital LLC and Thomas H. Lee Partners LP to privatize
Clear Channel Communications Inc. last year in a $17.9 billion
deal, posted a loss of $418.2 million. A year earlier, when the
company operated as Clear Channel Communications, it posted income
of $799.7 million. The latest results included $33.6 million in
restructuring charges, while the prior year's results included
$638.2 million in income from discontinued operations.
The company has a heavy debt load - $22 billion compared with
about $5.9 billion a year earlier - because of debt it took on to
fund its privatization.
Last month, the company reported preliminary first-quarter
revenue fell 23% to $1.2 billion.
Clear Channel Communications, and thus CC Media, owns about 89%
of Clear Channel Outdoor.
The radio business, which has seen flat sales for years after
having flourished during the dot-com boom with heavy advertising,
posted a 22% drop in revenue. CC Media said last month it was
laying off about 590 people in the radio division and suspending
its 401(k) company match. The layoffs come on top of 1,850 job cuts
in January, which mostly affected sales.
Last week, Standard & Poor's Ratings Agency warned it is
considering lowering its credit ratings on CC Media further into
junk territory, saying weak advertising demand in the radio
industry and pressure on outdoor advertising would hurt results.
S&P already cut its ratings on the company once this year in
February.
Clear Channel Outdoor's shares closed Friday at $5.41, while CC
Media's closed at $1.90. Neither has traded premarket.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com