Diminished Sound: Emmis Q2 Radio Revenue Falls 6%

Emmis Communications Corporation announced that its radio revenue slid 6% in the second quarter of 2007 compared to the same period last year, from $79.1 million to $74.4 million. The drop contributed to an 89% dip in profits. However, this steep drop was also due to the uneven comparison with one-time gains in 2006 from discontinued operations.

Altogether, Emmis owns 21 FM and two AM domestic radio stations in New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis and Terre Haute, Ind.

While admitting the radio revenue slide was troubling, Emmis chairman and CEO Jeff Smulyan said he expected improved results from Emmis' recent decision to switch its national ad sales rep duties to Katz Media Group, which is owned by Clear Channel.

Still, in a note to investors, Bank of America analyst Jonathan Jacoby was pessimistic: "We are projecting [Emmis'] domestic radio revenues to decline 9 percent ... to $63.6 million.

Jacoby's gloomy assessment was based on soft ad demand for the radio business overall: "Our checks indicate continued weakness in the radio industry, with no signs of a pickup in 4Q."



Indeed, a number of major broadcasters reported weak results in the second quarter, while issuing discouraging guidance for the rest of the year. Cox Radio's second-quarter net income fell 21%, CBS revenue fell 11%, Cumulus Media was flat, and Radio One's revenues fell 6%. However, Clear Channel Radio, the nation's largest broadcaster, said revenue increased 5% during 2Q.

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