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Westwood One profits tumble on soft ad sales

Total revs, less sales commissions, fell to $132.7 mil

Leading U.S. radio programming network Westwood One on Tuesday reported its net profit dove 20% for the second quarter ended June 30, as the radio sector continues to bear the brunt of the tight ad climate.

Gotham-based Westwood, which is minority-owned and managed by Viacom’s Infinity Broadcasting, said Q2 net income was $24.3 million, down from $30.5 million in the same three-month period a year ago. Total revenues, less sales commissions, also fell to $132.7 million in the quarter, off from $140.8 million last year.

Below estimates

The numbers came in under Wall Street estimates that had already reduced expectations after the company warned in early July that advertising were slow to return to pre-Iraq-war spending levels.

Company had warned investors to expect flat revenues for the full year 2003, with revenues likely to be flat or marginally higher compared with 2002, while operating income could slip.

As a result of slower Q2 sales, operating income fell to $41.7 million, compared with $49.7 million in the second quarter of 2002. Operating expenses were flat, as additional costs for new program offerings were offset by reductions in employee expenses.

Long-term optimism

Prexy-CEO Shane Coppola said the company “remains strong and well-positioned for the long term. As we disclosed in July, despite the first-half softness, we continue to see modest improvements in our business in the second half of the year. That improvement, combined with our tight cost controls, will enable us to return to delivering solid quarterly results.”

Coppola said company will continue to buy back stock to boost stockholder value.