Clear Channel Outdoor 3Q Up on Int’l Business

SAN ANTONIO – It’s more of the same for Clear Channel Outdoor (NYSE:CCO) with the latest financial results: international up, North America flat.

This morning, the company reported revenues of $742 million for third-quarter 2014, showing a 3% year-to-year growth from the same time last year. The positives, however, all come from outside North America.

Clear Channel Outdoor

Bob Pittman, Clear Channel Outdoor

The $329.5 million in 3Q 2014 revenues for CCO’s Americas division represented a $1.8 million (1%) dip from the same time last year. A company statement this morning cited lower national account revenues as the prime culprit; decreases in traditional product lines also partially offset higher digital revenues.

The International division offered a 5.5% increase from last year’s third quarter to $413.2 million in revenues for 3Q 2014. Growth in Chinese and western European markets fueled the uptick.

Operating expenses of $344.4 million for the International division in 3Q 2014 – a 4% increase from last year – cut into returns. The Americas division showed $195.9 million for operations, paring slightly more than $700,000 from 3Q 2013.

CCO’s total third-quarter OIBDA (operating income before depreciation and amortization) of $170.2 million this year is up 1.7% from 3Q 2013.

“With demand for out-of-home advertising increasing around the world, we kept building momentum in our Outdoor businesses during the quarter,” said Bob Pittman, CCO executive chairman. “We drove solid growth at our International operations this quarter and we’ve seen a consistent improvement in our Americas segment since the beginning of the year.

“Our digital portfolio continues to expand, thereby fueling innovative solutions and initiatives in the U.S. and abroad. As we continue to work with the world’s biggest brands and agencies in advertising, creative and media, we are engaging global consumers more deeply than ever.”

“We continue to deliver strong growth in our International business, with revenues increasing 5% and OIBDAN increasing 14% in the third quarter,” said CEO William Eccleshare. “Our new contracts in Italy, France and China, as well as our continued focus on superior execution are driving top and bottom line results.

“The growth of our local advertising business in the Americas remains strong, and we continued to address our sales organization and operational leadership during the quarter — we are pleased with the improvements we’ve seen since the beginning of the year.”

CCO installed 125 new digital displays in international markets for an end of quarter total of over 4,200 displays and 17 new digital billboards in North America for an end of quarter total of 1,125 across 40 markets.

The company’s 10-Q filing for third-quarter 2014 with the Securities and Exchange Commission (SEC) yielded few surprises, although it noted that the continuing controversy over its Los Angeles digital billboards is a primary factor in North American revenue losses. A California Supreme Court ruling concerning digital conversions shut down 77 operating digital billboards in April 2013.

CCO, according to the 10-Q, is “seeking permits under the existing city sign code to either wrap the LED faces with vinyl or convert the LED faces to traditional static signs, and has obtained a number of such permits.” It’s also pursuing a new Los Angeles city ordinance to permit digital billboards.

Neither the company’s 3Q 2014 press statement, nor the 10-Q, addressed the departure of former Americas division chief Suzanne Grimes in mid-August. The company also hasn’t filed an amended 8-K statement with the SEC concerning any separation agreement.