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Clear Channel Reports Net Income of $47 Million
SAN ANTONIO -- Clear Channel Communications Inc. today reported record results for its quarter ended March 31. Revenues reached $2 billion, up 11% over the first quarter of 2003. Net income and diluted earnings per share grew 64% and 58%, respectively, to $116.5 million and 19 cents per diluted share compared to the year-ago quarter.The 2004 net income includes $47 million and $11.6 million of pre-tax gains related to the sale of the company's remaining investment in Univision Communications and the sale of radio operating assets, respectively. These gains were offset by a $31.4 million pre-tax loss on the early extinguishment of debt. "We are off to a great start for the year and are pleased to report record first quarter results," comments Lowry Mays, chairman and chief executive officer. "Our results this quarter highlight the tremendous operating leverage of our businesses in an improving revenue environment," adds Mark Mays, president and chief operating officer. "We realized impressive revenue gains in each of our operating divisions, and were successful in translating this performance into cash flow and earnings growth. In addition, during the quarter we initiated a $1 billion share buyback program, providing us with another avenue to increase shareholder value. With the economy strengthening and the advertising environment continuing to improve, we are ideally positioned to deliver impressive growth for the remainder of the year and beyond."Lowry Mays is now recovering from recent surgery. Last Friday, Mark Mays says, Lowry Mays "woke up with numbness on his left side and was admitted to the hospital for testing. The doctors found some swelling of his brain caused by localized bleeding and a small blood clot. He underwent surgery Friday afternoon to relieve pressure caused by the swelling. The surgery was successful and Lowry is in good spirits and mentally alert. He even started grilling me about the business shortly after he came out of surgery. We and his team of doctors expect a complete recovery." Earlier this year, Clear Channel was granted permission from the Federal Communications Commission to purchase three radio stations in the Youngstown area (read story).Clear Channel's radio broadcasting revenue increased 5% to $832.9 million during the first quarter of 2004 compared to the same period of 2003. Revenue growth was lead by resurgent local advertising, growth in network revenue primarily from the company's syndicated radio programs and growth in traffic revenue. Revenue grew sequentially throughout the first quarter of 2004, with March being the strongest month. During the first quarter of 2004, the majority of the company's markets grew in-line with the overall revenue growth in its radio segment. Strong local and national advertising categories during the first quarter included services, automotive, entertainment and consumer products.Operating expenses increased 3% to $512.3 million during the first quarter of 2004 compared to the same period of 2003. The increase is primarily from an increase in programming and promotion costs, increased sales related expenses driven by commission and accrued bonus expenses and an increase in general and administrative expenses associated with an increase in the cost of employee health care benefits.The company's outdoor advertising revenue increased 16% to $521.6 million during the first quarter of 2004 compared to the same period of 2003. Growth was led by strong domestic bulletin and international street furniture and billboard revenues. Also contributing to the increase was $10.4 million from the purchase and consolidation of the company's outdoor advertising joint venture in Australia, which it had accounted for as an equity method investment during the first quarter of 2003. Live entertainment segment revenue increased 17% to $514 million during the first quarte. Increased concert ticket sales from additional shows and higher attendance at events such as Bette Midler and Britney Spears drove the increase. The company also saw increased touring revenue from events such as David Bowie. Revenue from sponsorships was another contributing factor to the growth. Also underlying the revenue increase was approximately $16.4 million from foreign exchange.For the three months ended March 31, cash flow from operating activities was $530.8 million, cash flow provided from investing activities was $435.7 million, and cash flow used in financingactivities was $895.8 million for a net increase in cash of $70.7 million. Cash flow from investing activities for the current quarter was positively impacted $599.4 million from the proceeds on the sale of Univision.As of May 4, Clear Channel has approximately $1.8 billion available on its bank credit facilities. The company does not have any public debt maturing during 2004.Visit Clear Channel Communications Inc.: www.clearchannel.com "