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Chancellor Media's Earnings Rise 57%

May 13, 1999|From Bloomberg News

Chancellor Media Corp., soon to be the No. 1 U.S. radio station owner, said cash flow rose faster than expected in the first quarter as advertising revenue surged.

The Dallas-based radio and billboard company said earnings before interest, taxes, depreciation and amortization--a key measure of a broadcaster's performance--rose 57% to $123.9 million from $78.7 million. Revenue rose 50% to $350.3 million.

Chancellor, owner of the syndicated "American Top 40 With Casey Kasem," boosted radio advertising revenue and profit margins by acquiring clusters of radio stations in many markets and by selling more ads without increasing sales staffs, said Merger Insight analyst Tom Burnett.

"They cover a lot more listeners with less marketing staff," he said. "It's the same kind of clustering, leveraging and efficiencies they always harp on."

Chancellor is expected to complete its $4.1-billion acquisition of Austin, Texas-based Capstar Broadcasting Corp. in July.

The company's radio stations, which will soon number 465 after that and earlier acquisitions, also had more listeners, spokeswoman Elaine Locke said. Radio accounts for 80% of the company's revenue. Chancellor was also helped by national sales and syndication networks started last year.

Chancellor shares rose $1.88 to close at $56.94 on Nasdaq.

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