Clear Channel on Friday became the second radio conglom in as many days to take a big writedown as a $4.9 billion charge sank it deep into the red in an otherwise on-target quarter.
On Thursday, Viacom took an $18 billion charge to write down the value of its radio and outdoor advertising businesses.
But the news wasn’t as bad for Clear Channel, which took the charge to conform with SEC rules involving the value of Federal Communications Commission-granted radio licenses and not to write down its assets as Viacom’s Infinity unit did.
Excluding the massive charge, Clear Channel made a profit of $214.3 million in the fourth quarter, up nearly 15% from a year ago. Revenue was $2.31 billion, up just 1%.
Company’s outdoor advertising unit was its primary growth driver, with revenue up 12% to $685.7 million and operating income up 27% at $106.4 million. Radio revenue was flat at $964.5 million, with operating income down 1% at $359.7 million.
Live entertainment revenue was down 12% at $525.5 million. Unit slipped into an operating loss of $13.1 million.
Unlike Infinity, which is focusing more on the biggest radio markets, Clear Channel said it experienced growth primarily in its small- to mid-size markets. National advertising was down last year compared to 2003.
In a bid to stem audience losses and increase the value of its inventory, Clear Channel cut commercial minutes by an average of 20% starting Dec. 15 and is focusing more on 30-second rather than 60-second spots.
For all of 2004, company’s net income excluding its writeoff was down 23% to $845.8 million on revenue of $9.4 billion, up 5% from 2003.
To buoy its beleaguered stock, which fell 27% in 2004 amid woes for the radio industry, Clear Channel will spend $1 billion this year buying up shares on top of the nearly $2 billion it invested last year.
Investors weren’t too happy with the results, as Clear Channel shares fell 3% Friday to $32.75.