Cox Reports 5% Drop In Q1; Neil Urges PPM Accreditation During Earnings Call
May 7, 2008 at 1:21 PM (PT)
COX RADIO said TODAY (5/7) its first-quarter profit slipped 5% as national and local ad revenue declined, but the results still managed to beat WALL STREET's expectations.
Earnings dropped to $12.8 million, or 14 cents per share, compared with $13.5 million, or 14 cents per share, a year earlier. Analysts expected net income of 12 cents per share, according to a THOMSON FINANCIAL poll. The company had fewer shares outstanding in the 2008 first quarter.
For the period ended MARCH 31st, revenue fell 3% to $97.8 million from $100.8 million on weak performances from stations in ATLANTA, ORLANDO, MIAMI, TAMPA and RICHMOND. The results topped analysts' estimate of $96.9 million.
Local revenue slipped to $68.8 million from $71.9 million, while national revenue dropped to $20.6 million from $21.4 million. Internet and other nontraditional revenue climbed 12.5% during the quarter.
Earnings Call -- Critical Of PPM
In addition to reviewing the financials during the COX RADIO earnings conference call, which indicated that future pacings in Q2 are down in a volatile market, Pres./CEO BOB NEIL referred to BEASLEY BROADCASTING President BRUCE BEASLEY's issues with PPM in PHILADELPHIA (NET NEWS 5/6), and stressed that while COX is supporting electronic ratings measurement, "PPM should not roll out until it's got MRC accreditation in other markets besides HOUSTON. This should happen before the richest media markets (NEW YORK, LOS ANGELES) roll out.
"If ARBITRON is down in indexing they deflect that saying they hit the sample target. In other cases they say the opposite. Which is it? They are in over their heads. All we are asking, and it's not a big ask, get the science verified before you start rolling out more markets. If you can't get it right in PHILDELPHIA how can they expected to get it right in other more complicated markets?"
He also took a swipe at ARBITRON execs and their bonus structures being based on the continued rollout of PPM over the accuracy of the data, which is why he called for MRC accreditation. "I find it disheartening that ARBTRON's management gets paid to roll this out right or wrong. This is morally wrong. We believe in electronic measurement but it's got to be right."
NEIL went onto say that while the paper diary has its own problems, "We would rather live with an accredited service than one that's not. There is a lot of volatility in the PPM with indexing down in the 70s. That's a failing grade. We'd hoped PPM would solve these issues."
He was also upbeat about the success of WHPT/TAMPA's BUBBA THE LOVE SPONGE show, and forecast that it would also help in JACKSONVILLE (at WFYV) where they have two trends are waiting on a book, but stopped short of detailing any syndication plans.