Lamar Advertising Corp. reported fourth-quarter earnings of $7.2 million, or 8 cents per share, compared with $6.4 million, or 7 cents per share, for the fourth quarter of 2011.
For the year, the Baton Rouge outdoor advertising company’s earnings were $9.8 million, or 10 cents per share, versus $8.6 million, or 9 cents per share, in 2011.
During a Wednesday conference call with investors and stock analysts, Lamar Chief Executive Officer Sean E. Reilly said the fourth-quarter results included some encouraging signs, including:
- Advertising by local businesses increased by 3.4 percent.
- Retailers made up the largest single category of business for the first time, with 13 percent of the total book of business.
- Automotive ads accounted for 6 percent of Lamar’s business, up 14 percent from 2011. And it appears heading into the first quarter that automotive will again increase in the low double digits, Reilly said.
- The amount of real estate advertising grew for the first time since the financial markets crashed.
“That’s something we’ve been looking for … ever since the downturn,” Reilly said.
Wall Street analysts surveyed by Thomson Reuters expected fourth-quarter earnings of 10 cents per share.
Lamar’s fourth-quarter results included a $9.7 million loss on the early payment of debt. During the quarter, the company paid $436.1 million to pay down a loan and retire senior subordinated notes, financial securities that are not backed by collateral.
In the case of default, creditors with subordinated debt don’t get paid until senior debtholders are paid in full, according to Investopedia.com.
Lamar refinanced that debt by selling $535.0 million of senior subordinated notes. The company used $145.0 million of the proceeds to buy NextMedia.
Lamar reported fourth-quarter revenue of $305.5 million, a 6 percent increase over the $288.2 million for the fourth quarter of 2011.
For the year, Lamar reported revenue of $1.2 billion, a 4.4 percent increase over the $1.1 billion generated in 2011.
Lamar said it expects first-quarter revenue of $282 million to $285 million, an increase of about 2 percent to 3 percent.
Stock analysts have forecast a loss of 4 cents per share for the first quarter.
In its fourth-quarter report, Lamar said it still is awaiting word on whether the Internal Revenue Service will approve the company’s proposal to convert to a Real Estate Investment Trust.
Reilly said the company expects to have some information on the ruling sometime before the next quarterly report.
Real Estate Investment Trusts pay no corporate income tax as long as they distribute at least 90 percent of earnings to shareholders. Shareholders pay income tax on the dividends.
Lamar’s stock gained $1.84, or more than 4 percent, to close Thursday at $45.45.