Clear Channel Sees Profit Fall as It Airs Fewer Commercials

Clear Channel Communications Inc. said Monday that third-quarter profit fell 21% because the company aired fewer commercials, part of a plan to draw more listeners to its 1,200 stations.

Net income declined to $205.5 million, or 38 cents a share, from $261.2 million, or 44 cents, a year earlier, the San Antonio-based company said. The profit matched the average analyst estimate from Thomson Financial. Sales rose 1.1% to $2.68 billion.

Clear Channel is cutting advertising time on its stations to build ratings and stem audience defection to competitors such as satellite radio and the Internet. The media company’s “Less Is More” strategy won’t pay off until there is enough demand to support higher prices for a smaller number of ad minutes, said David Miller, an analyst at Sanders Morris Harris in Los Angeles.

“Right now the environment just isn’t strong enough for ‘Less Is More’ to have its intended effects,” Miller said.

The shares rose to $31.04 in extended trading, after the company announced its results. They slipped 2 cents to $30.91 in the regular session and have dropped 8% this year.

Clear Channel plans to sell 10% of its growing billboard advertising unit to the public and spin off its live-entertainment division. The breakup is intended to boost growth at those units. Both transactions probably will be completed by the end of the year, the company said.

Clear Channel also said it planned to return about $1.6 billion to shareholders either through share repurchases, a special dividend or both.