Disappointing quarterly earnings results from radio broadcaster Emmis Communications dragged down stock prices across the entire sector on Tuesday, as ongoing concerns over the health of the radio business flared up yet again.
Emmis posted net income of $2.6 million for the quarter ended in May, compared with a loss of almost $166 million in the same period a year ago. But its per-share earnings came in a penny shy of Wall Street’s consensus estimates.
Company did slightly better on the top line. Sales were up 4% to $142 million, from just under $137 million in the same period a year earlier. And Emmis said its revenues for the coming quarter would come in ahead of estimates at roughly $155 million.
Still, investors bid the stock down by more than 5% in Tuesday’s trading, for a closing price of $21.95. Meanwhile, industry giant Clear Channel slipped by 1.5% to $41.76, radio-programming firm Westwood One ebbed 0.7% to $33.69, and Infinity Broadcasting parent Viacom fell 0.5% to $43.47.
Infinity set off a wave of pessimism about the radio business this spring when it was singled out by Viacom operating chief Mel Karmazin as a source of weakness for the otherwise well-performing media conglom.
The radio unit saw revenues sink by 2% last year — lagging the market and falling well behind Viacom’s previous estimates for high single-digit growth. Karmazin placed the blame squarely on Infinity’s sales division, and sacked head of radio operations John Fullam.
In other Emmis news, the radio chain said it had picked up a 50.1% stake in a six-station radio cluster based in Austin, Texas, for $105 million. Stations covered under the deal are KLBJ-AM (590 News-Talk), KLBJ-FM (93.7 Rock), KGSR-FM (107.1 Adult Alternative), KROX-FM (101.5 Alternative), KEYI-FM (103.5 Oldies) and KXMG-FM (93.3 CHR).