Radio One 4th quarter is profitable

Improved ad market, audience growth noted

February 12, 2003|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

Lanham-based Radio One Inc., the nation's largest radio broadcaster serving black listeners, reported yesterday a profitable fourth quarter as the advertising market improved and the audience grew at many of its stations.

Net income was $3 million or 3 cents a share, compared with a loss of $15 million, or 16 cents per share, for the corresponding period a year earlier.

Two key indicators of a company's performance in the radio industry were positive for Radio One in the three months that ended Dec. 31: Net broadcast revenue was $76.9 million, up 14 percent from $67.4 million the year before, while broadcast cash flow climbed 19 percent, from $33 million to $39 million.

For the year, the company posted a net income of $7 million or 7 cents a share. Net broadcast revenue was $151 million and broadcast cash flow $123 million.

"We feel as though our balance sheet is in very good shape today and improving as we move forward," Scott R. Royster, Radio One's executive vice president and chief financial officer, said during a conference call with analysts yesterday.

Analysts said that Radio One benefited from an upswing in advertising throughout the industry. Radio advertising was up 11 percent in the fourth quarter, analysts said.

Analysts said its niche in the African-American marketplace has also helped the company continue to outperform the rest of the industry.

Radio One is the nation's seventh-largest radio broadcaster, owning or operating 66 stations in 22 of the largest markets in the country. The company also programs five channels on the XM Satellite Radio Inc. system

"The urban marketplace is growing, and that's increasing their ratings," said Kit Spring, a media analyst for Stifel Nicolaus & Co. "And since they're reaching a larger audience, they can charge their advertisers more money per unit."

Radio One executives also reassured investors concerned that the company is facing increased competition in markets such as Baltimore, Houston and Los Angeles. In Baltimore, Radio One's 92.3 FM competes head-on with 105.7 FM, which is owned by the Infinity radio division of Viacom, a major media conglomerate.

"While we agree that competition has increased in the last five years, we strongly disagree that this will derail our growth process," said Alfred C. Liggins III, president and chief executive officer.

Analysts said concerns over new competition are overblown.

"Historically, this company has outperformed the industry by a much wider margin, and that is narrowing," Spring said. "But they're still doing well. If you have success, people are going to copy you."

Radio One said it expects first-quarter broadcast revenue of $64.6 million and broadcast cash flow of $29.1 million.

Radio One stock closed yesterday at $13.34, down 93 cents.

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