• Outfront revenues grow 1.4% in 2Q 2018

    Outfront announced second quarter earnings yesterday.  Here are the results from the earnings release and conference call transcript.

    • CEO Jeremy Male summarized the quarter: “Local advertising growth was solid. National advertising, which have been declining, reached breakeven. Digital growth remained strong. And importantly, both digital and static yields were up. Our U.S. Media Transit business did not perform as well during the second quarter and was down 3%, while local advertising was solid, national weighed on the overall result.”
    • Revenues increased 1.4% to $402 million during the second quarter.  Billboard revenues increased 2.3% but transit advertising declined 0.6% due to a decline in national advertising.    Revenues adjusted for acquisitions increased 0.2% to $397 million.
    • Adjusted EBIDTA increased by 2.6% to $125 million.
    • Capital Expenditures totaled $30 million during the second quarter of 2018.  During the quarter the company added 15 digital billboards in the US and 11 in Canada bringing the total number of digital billboards to 867 in the United States and 176 in Canada.
    • Outfront has $2.3 billion in debt.  Outfront’s Debt/Cashflow is 5.0 times, slightly above Lamar’s 3.6 times but well below Clear Channel Outdoor’s overleveraged 8.7 times

    Insider’s take:  1.4% revenue growth in the second quarter trailed the 4% improvement in US GDP in the second quarter.  Worrisome to see weak transit revenues just ahead of the heavy capital expenditures for the MTA rollout.  The market didn’t like the news.  Outfront stock closed down 9% today compared to Lamar (down 1%), Clear Channel Outdoor (up 1%),  and the S&P 500 (flat).


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