Arbitron Confident Despite Q3 Declines

Ratings giant Arbitron has announced a drop in third quarter income to $13.7m, compared with $17.0m for the third quarter of 2008, which it say is largely due to client losses and costs associated with the commercialization of its Portable People Meter (PPM).

During the period, revenue declined 4.3% to $98.1m ($102.5m in 2008), which Arbitron says was partly caused by the decision by broadcasters Cumulus and Clear Channel to switch to using Nielsen's diary-based ratings in a number of markets; the impact of Univision not subscribing to the PPM service in certain markets; and the continued impact of the advertising recession on renewals and new business.

Comparability between the 2008 and 2009 third quarters was also affected by the transition of Arbitron's services from diary to PPM. The firm says that the planned increase in expenditures for the commercialization of its PPM ratings service and the introduction of cell-phone-only household sampling in diary markets were offset by savings realized from its reorganization and restructuring program.

Costs and expenses for the third quarter increased from $72.1m in 2008 to $73.5m in 2009, due to a $1.8m pension expense for those involved in this program.

Earnings before interest and income tax expense (EBIT) for the quarter were $22.7m, compared with EBIT of $28.2m for the third quarter of 2008.

For the nine months ended September 30, 2009, revenue increased 3% to $283.4m ($275.2m in 2008). EBIT decreased 12.6% to $49.3m ($56.4m in 2008), and net income dropped by $4.3m to $29.6m ($33.8m in 2008).

'We continue to receive positive feedback from the market that electronic measurement is improving broadcasters' programming and sales strategies,' said President and CEO Michael Skarzynski. 'Our goal is to help the radio industry leverage the advantages that PPM can offer to increase the value and utility of radio for local and national advertisers in all markets.'

For the full year 2009, Arbitron says it continues to expect revenue to increase between 2% and 6% from $368.8m in 2008.

Shares closed at $23.37 yesterday on the New York Stock Exchange.

Web site: www.arbitron.com .