AMFM cash flow jumps but shares fall
Soon-to-be parent Clear Channel's SFX buy sinks stock
By David B. Wilkerson, CBS MarketWatch
Last Update: 12:51 PM ET Feb 29, 2000 Media Indexes
DALLAS (CBS.MW) -- AMFM on Tuesday reported higher after-tax cash flow that topped most analysts' estimates, but the shares dropped on news concerning Clear Channel Communications, which agreed to buy AMFM late last year.
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Updated:
02/29/2000 12:37:06 PM ET
Clear Channel (CCU: news, msgs) will buy event producer and promoter SFX Entertainment in a deal valued at about $4.4 billion. See related story. Clear Channel's stock fell 7 3/16 to 68 in recent trading.
Clear Channel agreed to buy AMFM last fall for $23.5 billion, in a transaction that will create the nation's largest radio company. Because the two stocks now trade in step with each other, AMFM (AFM: news, msgs) shares fell 7 3/16 to 61 5/16 Tuesday.
AMFM said after-tax cash flow -- a key measurement of a broadcasting company's growth -- rose to $155.7 million, or 69 cents a share, from $102.3 million, or 62 cents, in the year-earlier period. On average, analysts polled by First Call were looking for a figure of 67 cents.
Broadcast analysts focus on cash flow because frequent acquisitions and swaps lead to tax expenses that skew the bottom line.
The company's loss from operations was $68.9 million, or 31 cents a share, compared to a deficit of $33 million, or 23 cents, in the same period in 1998. Respondents to the First Call survey were expecting a loss of 35 cents.
Revenue climbed to $601 million from $374.8 million.
AMFM attributed its year-over-year cash flow growth to ratings gains at stations re-programmed with the company's "Jammin' Oldies" format, advertising revenue from ".com" companies, and improved performance at stations re-programmed with its "Rockin' Hits" format.
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