The San Antonio, Texas-based company earned $187 million/30 cents a share in the fourth quarter, compared to $184 million/30 cents a share a year ago. This was slightly less than the 33 cents a share that Thomson First Call had expected.
Radio advertising revenues dropped 1 percent in the quarter ended Dec. 31, to $965.7 million in 2003 from $979 million a year ago. Clear Channel President/Chief Operating Officer Mark Mays said the decline was due to the weak local advertising market in the fourth quarter. Mays said Clear Channel's revenue declines were "essentially in line with the industry," with both local and national down in the fourth quarter. Strong categories in the quarter included entertainment, finance, telecom, retail, and auto. Clear Channel said New York, Los Angeles, Cleveland, and Austin, Texas were its strongest Top 50 markets. Radio advertising revenues fell 1 percent for the year, to $3.6 billion in 2003 from $3.7 billion in 2002.
Revenues from Clear Channel's television station and its national radio rep firm, Katz, were down--but it wasn't clear by how much as those results aren't broken out. But radio division head John Hogan said the battle between Katz and its competitor, Interep, didn't have an effect on the fourth quarter.
"It was a very short-term disruptive event," Hogan said. "It took less than a week from start to finish, and I think we have rebounded very clearly."
At the same time, Clear Channel's outdoor division maintained double-digit growth for the quarter and the year. The outdoor unit's revenues jumped 14 percent in the quarter, to $614.8 million in 2003 from $538.2 million a year earlier. Annual outdoor revenues rose 17 percent to $2.1 billion in 2003, from $1.89 billion in 2002. Mays said the mid-single-digit increase was reflected across the entire division--domestic and international--and throughout its entire inventory. Bulletins had significant year-over-year increases in rates and occupancy, although the fourth quarter's growth was led by the poster business. Bulletins are about 60 percent of Clear Channel's outdoor revenues in the United States.
Top outdoor advertising categories were business/consumer services, entertainment, and automotive. Strong markets included New York, San Francisco, Miami, and Tampa, as well as Albuquerque, N.M., and Chattanooga, Tenn. The outdoor division is expected to keep growing in the first quarter, with revenue targets of between 4 percent and 6 percent more than a year ago.
Clear Channel was also more upbeat on the radio business, which it predicts will grow between 3 percent and 5 percent in the first quarter. Mays said he saw momentum in Clear Channel's pacings, although the company refused to give specifics.
"January was better than December; February was better than January; March is better than February," Mays said in a conference call with investors Tuesday morning. "That's a positive trend line."
Mays said the fourth-quarter revenues would have been better if Clear Channel hadn't held the line on pricing and occupancy, holding back inventory for higher pricing. The pricing did strengthen during the quarter, but only modestly. Sellout levels were down compared to 2002. The strategy for 2004? Much the same.
"It's our belief that by holding the [line on] pricing, it's going to be better for us in 2004," Mays said.