Shares of Clear Channel Outdoor (CCO -1.26%) are climbing today after the outdoor advertising company posted better results than investors expected.
As of 12:10 p.m. EDT, the stock was up 13.6%.
Clear Channel, the world's largest outdoor advertising company, is benefiting from a similar recovery in ad demand that digital platforms are seeing.
Revenue in the quarter jumped 68.6% to $531.1 million, easily beating analysts' consensus estimate of $496.4 million. Growth was strong in all of its geographies, with revenue in the Americas up 36%, while European revenue more than doubled -- evidence of the stricter lockdowns a year ago across the Atlantic.
On the bottom line, the media company reversed an adjusted EBITDA loss in the prior-year period to post an EBITDA profit of $97.3 million, showing the underlying business is improving. However, it still posted a steep net loss on a GAAP basis due to heavy interest expense and a loss on extinguishment of debt. Its loss of $0.27 per share was worse than analysts' consensus estimate for a $0.22-per-share loss.
Management did note that results improved with each month in the quarter, and CEO William Eccleshare said, "In the third quarter, all of our business segments are growing well ahead of last year with some markets now beginning to exceed 2019 levels, reflecting the easing of remaining mobility restrictions across the majority of our markets, pent-up advertising demand and the strength of our value proposition."
Clear Channel also announced that Eccleshare would step down as CEO at the end of the year. He will be replaced by Scott Wells, a current executive at the company.
For the third quarter, Clear Channel forecast Americas revenue of $315 million-$325 million and Europe revenue of $245 million-$255 million. Combined, that totals $560 million-$580 million, which compares favorably to analysts' consensus estimate at $552 million, and that doesn't include "other" revenue.
As an outdoor advertiser, Clear Channel's success is closely linked to the end of the pandemic, the normalization of the economy, and pent-up demand. As people around the world go back to commuting to the office and traveling for work and pleasure, the company will benefit.