Clear Channel Outdoor Revenue and cashflow down in 3Q 2017

Here are the results from Clear Channel Outdoor’s 3rd quarter 2017 financials and earnings call powerpoint.

  • Consolidated revenues decreased 3.6% to $669 million during the 3rd quarter of 2017 due to the sale of assets and the impact of foreign exchange movements.

 

  • Consolidated cashflow decreased 17.6% to $128.2 million during the third quarter of 2017.

 

  • Americas revenue (US, Canada and Latin America) decreased 2% to $322 million due to sale of the company’s Canadian business. Adjusted Americas revenues which exclude the impact of asset sales declined by 1%  due to the fact that the 2016 third quarter included heavy advertising for the 2016 Olympics.

 

  • Americas cashflow declined by 4.2% to $120 million due to higher lease expenses and overhead.

 

  • The company installed 450 new digital displays in the third quarter of 2017 for a total of 1,180 digital billboards in the Americas group and 13,300 digital displays across all markets.

 

  • Clear Channel Outdoor remains overleveraged but assets are worth more than debt.  Clear Channel Outdoor Debt/Cashflow is a high 9.0 versus 3.3 for Lamar and 4.9 for Outfront Media.  If you assume a sale price of 12X cashflow for the outdoor assets, however, Clear Channel Outdoor has a value well in excess of its debt.  The trend is worrisome.  Cashflow is declining and leverage is increasing.  Parent iHeartCommunications is in worse shape with higher leverage than Clear Channel Outdoor and radio assets which are worth a lower multiple than the out of home assets.


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  • The market was not happy.  Clear Channel Outdoor stock closed the day down 2.5% to $3.85.  Here’s a chart showing how Clear Channel Outdoor stock has traded over the past month.

 


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