Clear Channel profit falls 54% as costs rise

Clear Channel Communications Inc., the nation’s largest operator of radio stations, said Friday that its fourth-quarter earnings tumbled 54% as expenses rose ahead of an $18.7-billion planned buyout by a group of private equity firms.

Net income dropped to $211.3 million, or 43 cents a share, in the three months that ended Dec. 31, from $461.6 million, or 86 cents, a year earlier.

Expenses, including higher radio programming costs and the addition of noncash compensation under new accounting rules, were up 8% for the quarter to $1.23 billion.

Analysts surveyed by Thomson Financial were looking for profit of 41 cents a share on revenue of $1.89 billion.

Revenue at San Antonio-based Clear Channel rose 11% to $1.94 billion, helped by increased sales of shorter advertising spots and growth in the largest 100 markets.

Outdoor ad revenue expanded 13% to $830.7 million, while radio ad revenue added 7% to $966.8 million.

For the year, net income fell to $691.5 million, or $1.38 a share, from $935.7 million, or $1.71. Revenue rose 7% to $7.07 billion from $6.58 billion a year earlier.

Clear Channel executives did not discuss the earnings because of the pending buyout offer from an investment group led by Thomas H. Lee Partners and Bain Capital Partners.

The company said radio revenue probably would be down 0.5% for the full year, despite expected 1.8% growth this quarter. Revenue from the outdoor division is pacing up 6.6% for the year.

The equity buyout offer of $37.60 a share in cash and the assumption of $8 billion in debt awaits a shareholder vote March 21. The cash offer was more than a 10.2% premium over the closing stock price before the deal was announced.

Clear Channel stock rose 2 cents to $36.47.