Future's Cloudy for Clear Channel

Multimedia monster Clear Channel Communications (NYSE: CCU  ) turned up the volume today with a third-quarter report that was decidedly better than the headlines hyping a "60% drop" in earnings. Remember, last year's Q3 was juiced by a major gain from sale of a stake in Univision (NYSE: UVN  ) .

While better than it looked in some ways, the numbers show that the firm has yet to vanquish its lurking monster: flagging ad sales on the airwaves. Overall revenues of $2.6 billion were up 4% over last year's Q3, but radio revs were flat. Outdoor advertising, the No. 2 revenue source, climbed 11%, but the segment's expenses climbed nearly as much. The final problem: Without a $50 million gain on favorable foreign exchange, revenues would actually have been lower than in the prior-year period.

Earnings of $0.44 per share were 16% better than the showing last year if you discount the Univision windfall. One reason earnings growth is outrunning revenues is that the firm continues to buy back shares aggressively. There are 30 million fewer shares this year than last.

What's the problem for radio advertising? Could it be that my Foolish colleague Rick Munarriz is right? Are sat radio's dynamic duo, XM Satellite Radio (Nasdaq: XMSR  ) and Sirius Satellite Radio (Nasdaq: SIRI  ) , giving old fogies such as Clear Channel a bit of what for already? One thing's for sure: The company is worried about the roughly 59 minutes of advertising per hour than many of us hear on commercial radio. That's why it's planning for cutbacks beginning next year.

Will it be enough to turn the ship around? Tune in a couple of quarters from now to find out.

For related Foolishness:

• Some Fools are quite serious about Stern. Others see a billion-dollar sex joke.
• Last quarter, Clear Channel thought less might be more.
• Are skies getting any clearer for this outfit?

Seth Jayson has positions in no company mentioned. View his stock holdings and Fool profile here. Fool rules are here.