Charlie Morgan of Emmis Communications and President and CEO of Cumulus Media Inc Mary Berner speak onstage during day 2 of CRS 2018 on Feb. 6, 2018 in Nashville.Radio companies, suffering from sluggish radio advertising and underwhelming stock prices, might be starting to see the light. B Riley Securities analystnational advertising to pick up in the second half of 2023.
Cumulus’s net revenue of $210.1 million was down 11% year over year and 25% below the same quarter in pre-pandemic 2019, the companyFriday. Earnings before interest, taxes, depreciation and amortization of $30.7 million was down 32.6% from the prior-year period, but was helped by wringing out $12 million of cost reductions. Revenue was in line with the company’s expectations while EBITDA exceeded expectations. Adjusted EBTIDA of $28.7 million wasThat was good news for some investors.
The trends could portend good news for other radio companies. On Monday, shares of iHeartMedia rose 12.4% to $4.73. Even after dropping 3.2% to $4.58 on Tuesday, iHeartMedia’s stock stood at more than double its 52-week low of $2.21 set on May 26. iHeartMedia will report second-quarter earnings on Aug. 8.
For Cumulus, the quarter was all about optimizing what it can control while mitigating the downside of what it cannot control, said president and CEOduring Friday’s earnings call. “This proven skill set is serving us well as we make the best of the current tough ad environment,” said Lerner.Cumulus cut $5 million of fixed costs, repurchased $5.
What Cumulus cannot control is the willingness of brands to buy advertising. A weak national advertising environment since late 2022 “remained the main factor driving a decline in total revenue,” said, Cumulus executive vp, treasurer and chief financial officer. Local spot advertising revenue — which accounts for 80% of Cumulus’s total stock revenue — was down 7% while soft national advertising caused total broadcast radio revenue to fall 16.5%.
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