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Hopeful week for radio/media stocks?

Given the state of the economy, last week wasn’t so bad for radio/media company investors. And this week might improve depending on what Federal Reserve Chair Ben Bernanke says, and what Sirius XM reports in its fourth quarter and full 2009 earnings press conference on Thursday.

Saga Communications, Cumulus Media, Entercom, and Citadel all reported slight trading gains on Friday. Emmis, Westwood One, and Sirius all reported slight declines (although Sirius is still on the dollar menu). The week’s mildly bright spot was terrestrial and Internet radio giant CBS, whose stock rose nearly a point. On Thursday CBS reported revenues for the fourth quarter of 2009 came to $3.50 billion, down just 1% from $3.53 billion for the same quarter in 2008.

Here’s the radio excerpt of the report:

“Local Broadcasting revenues for the fourth quarter of 2009 decreased 8% to $680.0 million from $735.8 million for the same prior-year period reflecting lower radio and political advertising sales. Revenues for CBS Television Stations decreased 3% to $358.2 million from $369.3 million, and CBS Radio revenues decreased 12% to $322.2 million from $366.7 million for the same prior-year period, partially reflecting radio station divestitures. Non-political advertising sales increased 11% for CBS Television Stations and were flat for Local
Broadcasting.”

Perhaps this isn’t so bad, given the beating that radio took last year. Anyway, it’s not nearly as big as the drop CBS radio experienced in Q3: $318 million in revenue compared with the previous year’s same quarter: $392.5 million. And with the exception of troubled Citadel, most of these stocks are on the upswing after a period of decline.

The day before Sirius XM reports its earnings, Fed boss Bernanke will testify before the House Committee on Financial Services. And on that Thursday, he will speak to the Senate Committee on Banking, Housing, and Urban Affairs. The big question of course is how is the economy doing, and how fast will it mend? Last week the Fed raised the Discount Rate by just a smidgeon (1/4% to the surprise of some analysts) “in light of continued improvement in financial market conditions.”

Anyway, a somewhat optimistic report from Bernanke and a nice report for Sirius could mean a good week for radio by Friday. As RS’s Paul Riismandel noted last week: “The prevailing opinion on Wall Street seems to be that investors think Sirius XM has finally gotten its financial affairs in order, along with adding a net of 257,000 listeners–more than expected–in the fourth quarter of 2009.” So hope springs eternal, but we’ll have to see.


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