Clear Channel Posts Profit as Ad Sales Rebound

Radio giant Clear Channel Communications Inc. swung to a third-quarter profit because of a rebound in advertising sales, but the company said Tuesday that revenue growth had been restrained by lower attendance at its live-entertainment events.

The radio station chain said net income for the third quarter ended Sept. 30 jumped to $213 million, or 34 cents a share, up from a loss of $232 million, or 39 cents a share, for the same period a year earlier.

The earnings beat Wall Street’s estimate of 32 cents a share.

Clear Channel announced its results before the stock market opened.

Shares of the San Antonio-based company rose 5 cents on Tuesday to $37.80 on the New York Stock Exchange. So far this year Clear Channel’s shares have fallen 26%.

Sales for the most recent quarter rose to $2.34 billion, up 2% from $2.30 billion in the year-earlier period.

Analysts say Clear Channel had relatively easy comparisons to beat because of last year’s anemic third quarter, when advertisers scaled back their spending after the Sept. 11 terrorist attacks.

The company said last year that it had lost an estimated $30 million in sales in the 10 days after the attacks.

Clear Channel’s results also received help from changes in accounting rules this year that lowered its amortization expenses. If the rule had been in place last year, net income for the third quarter would have been $119 million, or 20 cents a share.

Clear Channel said it lifted prices for advertising across its 1,200 radio stations, which helped fuel an 11% radio revenue increase to $964 million.

Revenue increased 12% at the company’s outdoor division, which controls about 700,000 billboards and other ad spaces.

“The fundamentals of our business are sound,” said Clear Channel Chief Executive Lowry Mays.

But quarterly sales for Clear Channel’s entertainment division, which promotes concerts and other live events, dropped 16%, to $789.8 million.

Clear Channel President Mark Mays blamed the drop-off on a decline in attendance but said revenue sources including sponsorships and concessions offset the loss to a degree.

Company executives said they are trying to trim the company’s debt load.

Clear Channel said it had long-term debt of $9 billion at the end of the third quarter and had $2.6 billion in credit lines available under three domestic bank facilities.

Mark Mays said he expected revenue to continue rising through the fourth quarter.

He told analysts that “there’s no reason for you to anticipate that [our] momentum is going to stop.”