Clear Channel Communications Inc. said Tuesday that it had higher second-quarter profit as revenue rose in the company’s billboard unit and interest expense fell. Sales in radio, the company’s biggest business, dropped 2.1%.
Net income rose 5.6% to $251.3 million, or 41 cents a share, from $238 million, or 39 cents, a year earlier. Sales rose 6.9% to $2.32 billion, the San Antonio-based company said. Excluding gains in both periods, profit per share would have been little changed.
The company’s purchase last year of Ackerley Group Inc., a company with outdoor billboards in Boston and Seattle, helped make up for the decline in radio, where Clear Channel has 1,200 stations and is the biggest U.S. operator. President Mark Mays said radio sales were strengthening, a comment also made by executives at rival Infinity Broadcasting last week.
Mays said radio sales would rise by a “low single digit” percentage in the current quarter and by “low-to-mid single digits” for the year.
Viacom Inc. President Mel Karmazin expressed similar optimism last week when he said results were starting to improve at Viacom’s Infinity radio unit, the second-biggest U.S. radio broadcaster. The improvement at Infinity comes after two straight quarterly sales declines, including a 2.6% drop in the June quarter.
Clear Channel, which also owns television stations, said profit in the most recent quarter would have been $225.7 million, or 37 cents a share, related mostly to a gain of 4 cents from the early retirement of debt. Those earnings match the forecast of analysts surveyed by Thomson First Call.
Clear Channel shares fell 21 cents to $40.25 on the New York Stock Exchange.
Clear Channel said earnings before interest, taxes, depreciation and amortization, or EBITDA, rose less than 1% in the second quarter to $632.9 million from $627.3 million a year earlier.
The company said it expected EBITDA to rise by the “mid-to-high single digits” on a percentage basis in both the current quarter and full year.
Many investors and analysts use EBITDA as a financial gauge for indebted media companies such as Clear Channel because it measures how much cash the underlying business is generating to pay interest expense.