Clear Channel Swings to Profit

Earnings from continuing operations miss estimates.
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Clear Channel

(CCU) - Get Report

swung to a fourth-quarter profit from a charge-laden year-ago period, but reported slightly lower sales due in part to an effort to reduce advertising interruptions on its radio station.

Clear Channel earned $461.6 million, or 86 cents a share, in the quarter, compared with a loss of $4.67 billion, or $8.15 a share, a year ago. The 2004 quarter had a huge charge related to acquisition accounting. On a continuing-operations basis, earnings fell 20% to $183 million, or 34 cents a share, a penny below the Thomson First Call consensus estimate.

Sales fell 1% from a year ago to $1.76 billion. By segment, radio broadcasting revenue fell 6% from a year ago to $909.4 million; outdoor revenue rose 7% to $734.6 million; and other revenue fell 9% to $143.8 million.

Radio revenue fell because of the company's so-called "less is more" initiative, which is designed to reduce the overall commercial minutes on its stations. "The majority of the company's larger advertising categories declined during the year, including automotive and retail," Clear Channel said. "Yield, or revenue divided by total minutes of available inventory, improved throughout the year. The company's 30- and 15-second commercials as a percent of total commercial minutes available experienced a consistent increase throughout the year. Average unit rates also increased as the year progressed."

In August, Clear Channel authorized the return of about $1.6 billion to shareholders through buybacks or special dividends or both. Since then, it has returned $819.2 million by repurchasing 27.1 million shares and plans to pay a special dividend sometime in 2006, depending on the pace of buybacks, financial conditions, market economic conditions and other factors.