Why Barrington Research Remains Lukewarm On Clear Channel

In a report published Wednesday, Barrington Research analyst James C Goss maintained a Market Perform rating on

. In the report, Barrington Research noted, "Clear Channel reported Q4/14 EPS of $0.12, well above our $0.06 estimate and the $0.07 consensus, but this wide variance was reflective of a significant tax item that distorted reported results as a normal tax expense in Q4/13 swung to a meaningful credit in Q4/14." "Clear Channel Outdoor reported fourth quarter revenues in the domestic segment of $335.8 million, a nominal decline of 0.5% YOY. Lower national revenues were the primary cause of the decline," Goss said, while adding, "The company now has 1,175 digital boards in its Americas segment. Early declines in domestic national outdoor ad spending moderated as the year progressed." "International revenues were nominally lower in the quarter, with a 0.5% decline to $466.2 million. Revenue growth (excluding f/x impacts) was about 7% in the quarter, and the foreign exchange impact in the latest quarter was more significant as full-year f/x impacts were about 1% for 2014," the analyst noted. "Clear Channel Outdoor is a significant component of iHeart Media, formerly Clear Channel Media Holdings: This private equity controlled business is a dominant factor in both broadcast radio and global outdoor advertising, with Internet radio via iHeart Radio," Goss commented. "We maintain our MARKET PERFORM investment rating. Management has been concentrating on right-sizing its expense structure to create profit growth in a modest revenue growth environment. The stock sharply recovered the ground lost earlier in the year in recent months and is now trading at around its level of about a year ago," Goss explained.