Media and marketing information services provider Arbitron Inc. (ARB) reported Tuesday a decline in third-quarter profit, hurt by restructuring and reorganization costs, and losing of client subscriptions amid weak advertising market. The company also maintained its previous outlook for the full year.
For the third quarter, net income decreased to $13.72 million or $0.51 per share from $16.95 million or $0.63 per share in the previous year. The results of the latest quarter included restructuring and reorganization costs of $1.8 million pertaining to the acceleration of certain pension expense. Share-based compensation was $2.9 million, up from $2.1 million in the third quarter of fiscal 2008.
On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.53 per share in the third quarter. Analysts' estimates typically exclude special items.
Revenue for the period came down 4.3% to $98.12 million from $102.53 million in the third quarter of the prior fiscal year. Analysts were expecting revenue of $103.05 million in the third quarter.
Arbitron attributed the decrease in revenues to Cumulus and Clear Channel subscribing to a competitor's diary-based radio ratings service in a limited number of small and medium sized markets, beginning Spring 2009 survey period, Univision undoing its subscription to the Portable People Meter, or PPM, service in some markets, and the impact of sustained advertising recession on renewals and new business.
Further, the company said that comparability between the 2008 and 2009 third quarters is also affected by the earlier disclosed impact of the transition of Arbitron's services to PPM from diary.
Michael Skarzynski, Arbitron's Chief Executive, said, "In the third quarter of 2009, Arbitron commercialized the Portable People Meter radio ratings service in Tampa-St. Petersburg-Clearwater, St. Louis, Denver-Boulder, Baltimore and Pittsburgh, bringing to 25 the total number of PPM markets."
Skarzynski added that the company built out the PPM panels and commenced the pre-currency surveys for the eight additional PPM markets that it plans to commercialize in December 2009.
Selling, general and administrative expenses reduced 15.7% year-over-year to $16.91 million from $20.06 million, while research and development outlay rose 1.1% to $10.38 million from $10.27 million.
For the nine-month period, net income dipped to $29.56 million or $1.11 per share from $33.82 million or $1.23 per share in fiscal 2008. Revenue increased 3.0% to $283.41 million from $275.25 million in the same period last year.
Looking ahead to the full year, Arbitron reiterated its earlier outlook, expecting earnings to range between $1.40 to $1.55 a share. The company still guides revenue for fiscal 2009 to increase between 2% and 6% from full year 2008 revenue of $368.8 million. Analysts are currently looking for earnings of $1.43 per share on revenue of $386.35 million for 2009.
The company noted that the earnings guidance included the anticipated impact of $10.1 million in pre-tax restructuring and reorganization expenses.
ARB closed Monday's regular trading hours at $23.37 on the NASDAQ.
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