Not good, but improving is how Insider summarizes OUTFRONT’s third quarter 2020 earnings.  Here are the results from OUTFRONT’s 3Q 2020 earnings release, earnings deck and conference call.

• Revenues declined 39% to $282 million during the third quarter of 2020 as primarily because transit revenues are lagging due to low ridership.  Billboard revenues were down 23% while transit revenues were down 72%.  Jeremy Male said that company expects revenue to be down by 30 percent in the fourth quarter of 2020 but ridership and revenues will recover as a covid vaccine becomes available.  The company’s earnings deck contained a slide which shows that weekday ridership is running at only 12-30% of normal levels in places where it has it’s transit plant.

• Operating expenses declined 37% during the third quarter of 2020 due to lower transit costs, posting and maintenance expense and billboard lease expense.
• Selling General and Administrative expense declined 23% due to lower compensation costs and professional fees.
• Cashflow declined 51% to $69 million for the third quarter 0f 2020 due to reduced revenues.
• The company has $691 of cash and $498 of availability under a revolving line of credit.  The company also has $233 in unsold common stock under an equity offering program.  Total debt is $2.7 billion.  Leverage is 6.1:1.0 due to reduced cashflow.
• OUTFRONT added 41 digital billboards in the third quarter.  Male stated that capital spending will increase  next year: “We’re certainly looking to be ramping up our digital billboard investment…next year.  A couple of hundred boards and capital expenses of $80 million…Why will we do that?…We’re still making great returns…We’ll also keep our eye out for tuck-in acquisitions…We’re looking at a couple now.”

Insider’s take:  The numbers are headed in the right direction.  The third quarter’s 39% revenue reduction is better than the second quarter’s 49% revenue reduction.  OUTFRONT has the cash and liquidity to ride out things until ridership returns.  OUTFRONT finished the day up 1.4% on a day when Lamar was up 2.8%, the S&P was up 2.2% and Clear Channel Outdoor was down 2.0%.

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