Radio One revenue rose 22% in 3rd quarter

$12.8 million profit posted after loss in last year's 3Q

October 31, 2002|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

Radio One Inc., the nation's largest radio broadcaster serving black listeners, reported yesterday a 22 percent gain in third-quarter revenue as a competitive advertising environment drove advertisers from television to radio.

The Lanham-based company posted net income of $12.8 million, or 12 cents a share, for the quarter that ended Sept. 30. That compares with a net loss of $10.1 million, or 11 cents a share, in the third quarter of last year.

Net broadcast revenue, a key indicator of success in the industry, climbed to $80.5 million, from $66.2 million in the third quarter of 2001.

"This quarter was solid, consistent and predictable," said Scott Royster, Radio One chief financial officer, during a conference call with analysts. "We have achieved everything we said we would and have little to report that is bad."

An improved advertising climate helped boost the revenue of the entire radio industry, analysts said.

National television advertising spots sold out early, opening the market to local television stations and radio, said Jason Helfstein, a broadcast analyst for CIBC World Markets.

Radio One also benefited from the growth of several stations it has acquired in the past few years. The company has purchased more than 40 stations since 1999, more than doubling its size to 65 stations in 22 markets.

"Developing stations tend to do better than mature stations once you get past the initial growth curve," Helfstein said.

The company also said it expects to report net broadcast revenue of $76.9 million in the fourth quarter, up from $67.4 million a year earlier.

Royster said the company has taken advantage of low interest rates that should help net income next year.

The rates, which are to take effect in December, were on $200 million of bank debt. They were lowered from an average fixed rate of 6.41 percent to rates ranging from 2.55 percent to 3.39 percent.

Radio One said it is still interested in acquiring radio stations, but only in markets where the company already has a presence, as a way to gain market share.

"There's not going to be a torrid acquisition pace for this company," said Alfred C. Liggins III, Radio One chief executive officer and president.

The company is also looking to start a cable TV station aimed at a black audience.

Radio One shares fell $1.37 in trading yesterday on the Nasdaq stock market, closing at $16.50.

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