“A noteworthy performance for our company driven by digitization, sales execution and the growing importance of out of home in advertisers’ media mix” was how Outfront CEO introduced third quarter 2019 earnings.

Here are the highlights from the third quarter 2019 earnings release and earnings deck.

• Revenues grew 12% to $462 million during the third quarter of 2019 due to strength in national and local advertising.  Billboard revenues increased 8%.  Transit was up 21%.  This was OUTFRONT’s fourth consecutive quarter of double digit growth.
• US Billboard Yields improved by 9% which suggests OUTFRONT has been successful at increase rates as contracts renew.

• Expenses increased 13% to $323 million during the third quarter of 2019 due to higher transit franchise expenses, higher billboard lease expense and higher compensation costs.
• Cashflow increased 8% to $140 million for the third quarter of 2019.
• the company added 900 MTA station displays during the third quarter bringing the total number of MTA station displays to 3,668.  The MTA contract calls for 50,000 displays.
• Total Debt was $2.4 billion at September 30, 2019.  Debt/Cashflow was a moderate 4.43.  The company’s weighted average cost of debt is 4.9%.  Most of the company’s maturities are 2024 and beyond.

Insider’s take:  Great revenue performance but expenses are growing faster than revenues.  Outfront finished the day down 0.26% to $26.58 on a day when the S&P 500 gained 0.37%, Clear Channel gained 9.45% and Lamar declined 0.06%.

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