OUTFRONT is recovering from COVID slower than Lamar.  Here are the results from OUTFRONT’s 1Q 21 earnings release, 1Q 21 earnings presentation and conference call.

• Revenue declined by 33% to $259 million during the first quarter of 2021.  US billboard revenue was down 17%.  US transit revenue was down 67%.
• The company’s average billboard yield declined from $2,056 in the first quarter of 2020 to $1741 in the first quarter of 2021.  TV, entertainment, movies, travel and casinos accounted for half of the revenue decline.
• Total expenses declined 20% to $248 million during the first quarter of 2021 due to cuts in lease expense and maintenance and posting costs.
• Adjusted cashflow (Operating income before depreciation and amortization) declined from $75 million during the first quarter of 2020 to $11 million during the first quarter of 2021 due to reduced revenue.
• OUTFRONT spent $16 million on tuck-in acquisitions in Philadelphia, Phoenix and Atlanta.

CEO Jeremy Male says the second quarter will improve

Our expectations for the second quarter are for a return to significant growth with revenues up in the mid to high 40% range.  We feel increasingly positive about the rest of the year…Transit ridership across the country has remained stubbornly low, with rail ridership at about 25% of pre-pandemic levels.  But we are now seeing some green shoots.  Ridership on the New York City subway was up 40% in the first quarter compared to the fourth quarter average…it’s starting to move in the right direction.

Male says the bid-ask spread in the out of home M&A market is starting to narrow.

We’ve got more tuck-ins in the pipeline…we talked about a mismatch of valuations between buyers and sellers.  I think that’s starting to iron out a bit…We would like to see more tuck-ins as we go through the balance of this year.

Insider’s take:  OUTFRONT will start seeing huge revenue increases beginning in the next quarter as there are no more pre-covid comps and transit ridership begins to improve.  OUTFRONT closed the day down 4.1%.  The S&P 500 was flat.  Clear Channel Outdoor was flat.  Lamar was down 2.3%

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