Updated from 8:14 a.m. EST
stock took a hit Tuesday after the company's fourth-quarter earnings were roughly unchanged from a year ago due to weak local radio advertising.
The stock rebounded slightly as executives vowed a turnaround.
San Antonio-based Clear Channel earned $187.2 million, or 30 cents a share, in the latest quarter, compared with earnings of $183.9 million, or 30 cents a share, last year. Revenue rose 4% to $2.29 billion. Among its segments, radio revenue fell 1% to $965.8 million, billboard revenue rose 14% to $614.8 million, concert-ticket revenue rose 6% to $596.9 million, and other revenue fell 8% to $152.6 million.
The stock was recently down $1.19, or 2.7%, to $42.65. It went as low as $41.36 earlier.
In terms of operating income, radio results fell 6% to $364.3 million, billboard rose 44% to $83.8 million, concert tickets swung to a positive $4.7 million, and other income declined 40% to $14.8 million.
In describing similar trends in its full-year results, Clear Channel said "discontinued sports broadcasting rights such as the L.A. Dodgers, cessation of business with independent promoters and a revenue decline in the company's nationally syndicated radio business, contributed to the decline" in radio revenue.
Analysts surveyed by Thomson One Analytics had been forecasting earnings of 33 cents a share on overall revenue of $2.23 billion. The shares closed Monday at $43.84, down 83 cents, or 1.8%.
Executives speaking on a conference call tried to soothe investor pain, saying the current year would see a turnaround.
"I can't tell you how optimistic I am about 2004," said Mark Mays, president and chief operating officer. "All divisions of the company are keyed up to have a great 2004."
Revenue trends are positive for all divisions, said Mays, claiming that a deceleration in advertising that started after the Iraq war began hurt results in 2003.
"For all businesses in aggregate, December was better than November, January was better than December, and February was better than January," he said. March should continue the trend.
Edward Atorino, an analyst at Blaylock & Partners, said there is some reason for optimism. "Last year was not a good year," Antorino said. "The media business is coming back very slowly."
But Atorino noted that the company acted as if "the fourth quarter didn't happen" -- nothing new for the radio powerhouse.
"This is a company that manages expectations. They try to do their best to support their stock, which is perfectly legitimate," said Antorino, who holds no shares of the company. "Their job is to present their case to Wall Street and support their case that things are going to get better. They are not alone in what they do."
The company sees operating income in full-year 2004 increasing in the low double digits and earnings increasing in the mid-to-high teens.
Bill Burns, an analyst at investment bank Johnson & Rice, noted the 2004 guidance is conservative, falling short of analysts' consensus for $1.45 a share.
"I would expect earnings to be higher than
the mid-to-high teens guidance," said Burns, who owns shares of the company. Burns expects Clear Channel's 2004 earnings to rise 20% from 2003's $1.17 a share, excluding items.
Looking at the first quarter, the company said advertising revenue is increasing, and it forecast radio revenue to be up from 3% to 5%.
Clear Channel also maintained its previous guidance for $450 million in capital expenditures in 2004.