Radio broadcaster Emmis Communications
For the quarter, net revenues decreased 6.9% to $91.2 million and operating income fell 29% to $17.5 million, with station operating income down 18.8%. Emmis' two largest markets, New York and Los Angeles, continued to struggle, with Emmis down 21% and 26% in those markets, which contributed to a 11.5% decline in domestic radio revenue for the quarter. Automotive advertising was down 9%, as well as other major categories such as banks, movies, and beverages. On the bright side, international radio sales grew 9.5% and healthcare and cellular advertising improved.
During the conference call, management noted that it had warned investors last year that this year would be difficult. They also said they believed this quarter was the bottom, and that better times are ahead. Impressively, CEO Jeff Smulyan also put his money where his mouth was by only paying himself $1 in salary this year in order to help weather the storm.
There were also a number of interesting points during the earnings call. Emmis voiced its support for Arbitron's
Emmis was also the first to start talking with dMarc, now a Google
Although Emmis' recent results were pretty ugly, it's noteworthy that the company's CEO generously gave up his salary and has boldly indicated his belief in an industry turnaround. I'm still a little wary because I lump radio broadcasters in with newspapers, which have generally been value traps, but the radio broadcasting industry's low valuations and still-healthy cash flows might have some hidden value.
If you're interested in radio broadcasting companies like Emmis, you might want to take a free trial of the Motley Fool Income Investor. The newsletter has recommended radio operator Entercom
Fool contributor Emil Lee is an analyst and a disciple of value investing. He doesn't own shares in any of the companies mentioned above. The Motley Fool has a disclosure policy. Emil appreciates comments, concerns, and complaints.