Hispanic Broadcasting Stock Plunges

Hispanic Broadcasting Corp. shares fell as much as 36% after the biggest Spanish-language radio broadcaster in the U.S. said fourth-quarter revenue was less than it forecast because advertisers cut spending.

The company said fourth-quarter revenue was about $60 million, less than it expected. That’s 7.6% less than the $64.9 million in revenue the Dallas-based broadcaster reported for its third quarter. It had $55.9 million in revenue in the year-earlier fourth quarter.

Although investors had expected many English-language U.S. radio and television companies to show tepid sales growth in the December period, the faster-growing Spanish-language broadcasters were considered largely immune to a slower U.S. economy.

“That niche market was viewed as recession-proof,” said Andrew Marcus, an analyst at Deutsche Banc Alex. Brown. “Obviously that view has now changed.” Marcus lowered his rating on Hispanic Broadcasting on Monday to “buy” from “strong buy.”

Hispanic Broadcasting shares fell $11.13 to close at $23.88 on Monday on the New York Stock Exchange. Marcus also cut his rating on Univision Communications Inc., the largest U.S. Spanish-language TV broadcaster, to “buy” from “strong buy.” Univision shares fell $6.44 to close at $43.81 on the NYSE.

Hispanic Broadcasting’s scaled-back forecast came after its shares surged 31% three days ago, when Gordon Hodge, an analyst with Thomas Weisel Partners, said companies are spending more on Hispanic radio and television ads.

The company said cash flow was about $24.5 million to $25 million in its fourth quarter, 15% to 20% less than it forecast earlier in the quarter. The company had cash flow of $30.3 million in its third quarter.

The company said it sees 2001 revenue of $267 million, slightly more than the $265-million average estimate of six analysts surveyed by First Call/Thomson Financial, citing an expected pickup in sales.

Hispanic Broadcasting forecast profit of 43 cents a share, less than the 47 cents expected by analysts, as losses climb at its Internet division.