Weak Economy Pounds Entravision Communications’ Q1 Earnings
Spanish-Language Broadcaster Also Posted Strong Q1 in 2007
By Robert Marich -- Broadcasting & Cable, 5/1/2008 5:07:00 PM
Spanish-language broadcaster Entravision Communications reported sharply lower first-quarter earnings, which it blamed on soft advertising from the weak economy and comparisons to good year-ago earnings.
The Santa Monica, Calif.-based company incurred a $7.7 million loss applicable to common shareholders, or red ink of 8 cents per share, widening from a loss of $3.3 million (3 cents) a year ago. The Spanish-language media company, with 51 U.S. TV stations, posted a 2% decline in revenue to $55.6 million for the three months ended March 31.
In a statement, Entravision chairman and CEO Walter Ulloa cited the “challenging advertising environment due to general economic conditions.” In a barometer of core profitability, free cash flow plunged 60% to $2.7 million in the quarter.
The earnings announcement cited a reduction in the company’s TV ad rates for national advertising, which led to lower national ad revenue.
Entravision forecast that net revenue in the second quarter will “decrease by low- to mid-single-digit percentages and operating expenses to increase by low-single-digit percentages as compared to the second quarter of 2007.” Corporate expenses are expected to be flat, excluding non-cash stock-based compensation items.
The company bought $22.4 million in company stock in the first quarter. Yahoo Finance put Entravision’s stock-market capitalization at $657 million at the close of trading Thursday. The company has a pending $100 million sale of its outdoor Vista Media ad business to Lamar Advertising.
