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Emmis 1Q beats Street
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June 22, 2000: 3:14 p.m. ET
Radio and TV operator reports strong first-quarter results; buys stations
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NEW YORK (CNNfn) - Radio and TV station operator Emmis Communications Corp. on Thursday reported record first-quarter revenues and profits that beat Wall Street projections, citing strength in its radio business.
Emmis (EMMS: Research, Estimates) said it earned $3.7 million, or 8 cents a share, for its fiscal first quarter ended May 31, compared with $241,000, or 1 cent, in the year-earlier quarter. Analysts polled by First Call had expected the Indianapolis-based company to earn 6 cents a share.
 The company said after-tax cash flow, a key barometer of fiscal performance at media concerns, grew to $22 million in the quarter from $12.2 million in the same period one year ago. Broadcast cash flow rose to $38.7 million, up 43.8 percent over last year.
For the first quarter, Emmis' net revenue grew to $100.5 million from $72.4 million, a 39 percent increase over the same quarter of the prior year.
The results spurred a 10 percent boost in Emmis' shares, which traded Thursday afternoon at 48-1/2 after hitting session high of 49-1/8.
"The strength of our radio business -- especially in major markets -- is the best in the 30 years I've been in broadcasting," the company's chairman and chief executive, Jeff Smulyan, said in a statement.
In a conference call with analysts, Smulyan added, "the momentum in radio is outpacing other medium, because advertisers are now using it more as a primary medium."
 Analysts cheered the results, with First Union Securities upgrading its opinion on the stock to a rating of "strong buy" from "buy," while SG Cowen analyst Ed Hatch reiterated his "buy" rating.
The company noted, however, that while it sees steady growth through the year, it doubted it could reproduce the strength achieved in the early portion of 2000.
"The months of March, April and May are spectacular, but we don't expect to replicate that in the rest of the year," Smulyan told analysts. "We are seeing a little bit of a slowdown ... but clearly radio is growing in the minds of all advertisers."
Analysts said other major players in the radio sector, such as Infinity and Clear Channel, also expected a similar slowdown in growth for the remainder of the year.
St. Louis, Los Angeles stations acquired
Separately, the company also said it acquired the assets of six St. Louis, Mo.-based radio stations for $220 million from Sinclair Broadcast Group Inc. as part of a settlement in litigation concerning the properties.
In January, Sinclair said that it filed a lawsuit against Emmis relating to the 1999 sale of Sinclair's St. Louis radio and television stations. Emmis later filed a counter suit.
 Emmis intends to swap four of its St. Louis properties -- WKKX-FM, WIL-FM (which will be acquired), WRTH-AM, and WVRV-FM -- to Bonneville International in exchange for KZLA-FM in Los Angeles, the second-biggest market in the United States.
The company said the sale of the radio stations is subject to regulatory approval.
"With this deal, Emmis will achieve both our immediate goal of reaching closure on Sinclair and more importantly, our long-term goal of owning a second FM in Los Angeles," Smulyan said.
Driven to grow its radio assets, Emmis has in the last two weeks also acquired three Hearst-Argyle stations in Phoenix and radio stations in Denver and Phoenix. 
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Emmis
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