Markets

Lamar: Revenues Will Decline 15% This Quarter

By Jim Edwards

Updated on: February 26, 2009 / 6:28 PM EST / MoneyWatch

The Lamar Advertising canary just gets sicker and sicker. The company predicts its Q1 revenues will decline 15 percent. Lamar released its Q4 earnings today. Here's the news:

Revenues decreased by 8.4 percent to $279 million; the company saw a net loss of $6.8 million compared to net income of $4.5 million for the fourth quarter of 2007. The results were a shade better than the prediction by Wachovia.

BNET has previously argued that Lamar is a "canary in the coalmine" for the advertising business as a whole because it has a large range of clients, both local and national, and isn't affected by internet media shift. As Lamar goes, so goes everybody else -- as illustrated by the increasing number of layoffs at BBDO and elsewhere. We can assume from Lamar's forecast of its own results that the pattern will be repeated throughout the ad biz in Q1. Eyes should focus on WPP and Publicis which have either yet to announce mass layoffs or are successfully hiding them from the media.

But Lamar does have some good news: Its spend on digital billboards remains its largest single capital expenditure for the quarter and the year. Everyone knows digital billboards are the future. Americans are suckers for shiny things. When the recovery comes, watch Lamar pop.

Also, Lamar reported free cashflow of $52.2 million as compared to $41.4 million for the same period in 2007, a 26.1 percent increase. The company also suspended its stock buyback program in Q4, so it is not terribly surprising that it managed to engineer a positive cash position from such a negative quarter.