Entravision Reports Radio Revenue Drops, Digital Surges

Entravision Communications reported fourth quarter net revenue rose 5% to $73.4 million from $70 million in 2016. The overall increase was partially offset by a decline in the radio segment of $3.1 million, mainly due to decreases in both local and national and political ad revenue.  What the company calls “audio” revenues slipped 15% in fourth quarter, from $20.2 million to $17.1 million. While digital – greatly enhanced by the March 2017 acquisition of the international “Headway” platform – tripled, from $6.7 million to $20.3 million.

Walter F Ulloa

Operating expenses were up 10% to $45.1 million from $41.1 million. Operating income fell 72% to $4.1 million from $14.6. The company posted a net income of $12.9 million (14 cents per diluted share) as compared to $7 million (8 cents) in the year-ago period.

Chairman/CEO Walter F. Ulloa said, "During the fourth quarter, we achieved revenue growth driven by increases in our digital media segment attributable to the acquisition of Headway. This growth in our digital media segment offsets decreases in both our television and radio segments, which were affected by decreases in local and national advertising revenue and the loss of political advertising revenue compared to 2016... Looking ahead, we remain well positioned to build on our success in further attracting Latino and other audiences worldwide, and expanding our advertiser base to the benefit of our shareholders."

With radio accounting for just 5% of the company’s broadcast cash flow during the quarter, an analyst on the conference call asked if the company intends to sell the division. Ulloa made it clear during the call that Entravision has “no plan to divest the radio business at this time.”

Instead, it will take “some pretty strong measures to bolster revenue, but also to decrease our expenses significantly,” Ulloa said. That process got underway in the fourth quarter and the company is “already making some pretty important decisions around expense reduction,” he added.