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$9.72 -0.16 (-1.62%)
10/7/2008 11:06 AM

Cox Radio, Inc. (CXR)

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The Company is a national radio broadcast company whose business is acquiring, developing and operating radio stations located throughout the United States.

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Avatar NetscribeMedia (24.15) Submitted: 1/03/07 7:23 AM : Underperform Start Price: $16.30 CXR Score: 14.54

Cox radio, a subsidiary of Cox Enterprises is a radio broadcasting company in USA which owns and operates 79 radio stations in 18 markets with majority of their stations located in Sun Belt states. In 2006 national advertising has accounted for 22% of revenues while 70% came from local advertising.

The radio industry is being looked at with some skepticism by investors, as radio advertising is expected to grow by only 1% over the next five years, compared to the earlier forecast of 2%-3%, which will severely affect advertising rates. Additionally, the emergence of the World Wide Web as a medium of advertising has lead to many advertisers turning their backs on conventional channels of advertising like the radio. The bad news does not end here. With the advent of satellite radio, steaming internet radio and new technologies like Ipod and mp3, terrestrial radio is likely to face a decline in terms of listeners. These trends seem to be reflected in Cox Radio’s revenues in 2006 which is down slightly due to decline in both national and local revenues. Their online revenues have increased 48.3% but unfortunately this accounts for only 2% of revenues.

The company has announced tentative plans to fortify its online operations as its online revenues on the rise, quarter after quarter. Revenues in the fourth quarter are expected to be strong, mostly due to political revenues while the core growth remains flat. Additionally operating expenses during 2007 is also set to rise by $6 million thanks to an amendment to a pension plan. As the radio industry continues to face rough weather, it looks Cox radio will have a tough year ahead.

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Avatar NetscribeMedia (24.15) Submitted: 4/16/07 7:33 AM

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The sun seems to be setting on the terrestrial radio companies. The emergence of internet, Ipod and satellite radio has pushed terrestrial radio stations into the background. The advertisers are making a beeline for new media while ignoring the traditional media. The competition from newer media has made pricing a big issue for terrestrial radio companies.

Cox Radio acquired WOKV-FM for $7.7 million in September 2006. This station serves the Jacksonville, Florida market. Jacksonville is the most populous city in Florida and the 13th most populous city in the USA. This market is dominated by Cox and Clear Channel.

The company’s 2006 revenues increased slightly by 0.6%. An impairment charge of $176 million, however, resulted in a net loss of $24.4 million. Cox radio’s 2007 station operating expenses are expected to increase in the mid to high single digit range due to $6.8 million in additional pension costs.

The radio industry has been in overdrive ever since Sirius announced its intentions to buy XM radio in February. The Sirius XM merger could sound the death knell for terrestrial radio. The best radio jockeys including Howard Stern, Opie and Anthony work for these companies. They cover the Major League Baseball games as well as the National Football League. The merger, which is under the scanner of the authorities, will create a virtual monopoly.

Contrary, the recently introduced royalty rate increases for internet radio services will be music to the ears of the terrestrial radio stations. The entry of Google into radio ad sales could also be an event to savor. However, these are still early days and it remains to be seen whether the entry of this behemoth will actually result in a change in fortunes for the industry. Finally, there are rumors that Cox radio might be taken private by Cox enterprises who already own 64% of the company. The bleak outlook for the radio industry in general, however, suggests that Cox radio will have a tough year ahead.

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