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Clear Channel Rebounds to a Profit as Sales Rise

The media company says it expects a postwar bounce in advertising in the second quarter.

May 01, 2003|From Times Staff and Wire Reports

Clear Channel Communications Inc., the biggest U.S. owner of radio stations, rebounded to a first-quarter profit of $71 million as expenses fell and sales rose.

Clear Channel's net income of 12 cents a share contrasted with a net loss of $16.7 billion, or $27.85 a share, in the year-earlier quarter when Clear Channel wrote down the value of acquired assets.

Sales increased 4.8% to $1.78 billion from $1.7 billion.

Excluding the earlier write-down, Clear Channel said profit fell 21% from $90 million, or 15 cents a share, in the first quarter last year.

The sales increase was fed by double-digit growth in the company's outdoor advertising unit and radio sales.

Clear Channel, which owns television stations and billboards in addition to its 1,200 U.S. radio stations, said radio sales grew 1.6%, even as advertisers pared spending because of the war in Iraq.

With the conflict waning, Clear Channel said that advertising sales appeared to be picking up and that the company expected to outperform the rest of the radio industry in the second quarter.

The increase was also offset by a drop-off in revenue at the company's live-event division, which promotes concerts and Broadway productions.

Clear Channel said sales at the live-event unit fell 8% to $437.8 million.

Company executives said they planned to "hold the line" on advertising rates.

"It's our belief that it's very important to maintain those rates," Chief Operating Officer Mark Mays said.

"Maintaining those rates helps the overall industry grow at faster rates."

James Boyle, an analyst at Wachovia Securities who has an "outperform" rating on Clear Channel shares, said Clear Channel is "doing better than we had expected, and they are seeing an embryonic postwar pop.... That's encouraging but it's still very early."

Shares of Clear Channel Communications rose $1.42, or 3.8%, to $39.11 on the New York Stock Exchange.

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Bloomberg News was used in compiling this report.

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