Clear Channel Loss Wider Than Expected

Clear Channel Communications Inc. posted a first-quarter loss wider than analysts’ estimates because of a drop in radio advertising.

Clear Channel (CCU), which owns radio and television stations and outdoor-advertising displays, said its net loss came to $309.3 million, or 53 cents a share, compared with a loss of $39.4 million, or 12 cents a share, in the year-earlier period. The mean estimate of analysts surveyed by First Call/Thomson Financial was for a loss of 45 cents a share.

Net revenue doubled to $1.63 billion from $782.5 million a year earlier, primarily as the result of the firm’s acquisition last year of rival AMFM Inc. and concert promoter SFX Entertainment.

On a pro-forma basis, which includes its acquisitions’ year-earlier results but excludes divestitures and currency fluctuations, the company said its revenue fell to $1.66 billion from $1.81 billion a year earlier, and earnings before income, taxes, depreciation, and amortization dropped 12% to $467.1 million from $411.5 million a year ago.

After-tax cash flow, usually defined as net income excluding depreciation, amortization and one-time items, was $324 million, or 52 cents a diluted share, compared with $192.2 million, or 51 cents a diluted share in the year earlier.

Clear Channel said pro forma revenue at its radio division dropped 9%, hurt by weaker national sales, particularly in larger markets.

The company said its outdoor advertising business had relatively flat pro forma revenue growth in the first quarter, while the unit’s operating cash flow decreased 9% because of higher expenses and a difficult year-over-year comparison.

Clear Channel said its entertainment unit’s first quarter pro forma revenue fell 13% and operating cash flow fell 54% because its schedule for live events was different than in the first quarter of last year.

The company said it expects to post a net loss of $170 million, or 28 cents a share, in the second quarter.

Clear Channel on Thursday also withdrew guidance it gave in February for a 2001 loss of $392 million, or 67 cents a share and cash flow of $1.99 billion, or $3.16 a share, on revenue of $8.3 billion, because of the current advertising environment and lack of visibility into the second half of the year.

Copyright (c) 2001 Dow Jones & Company, Inc.