Emmis cuts expenses, turns profit in first quarter

Emmis Communications Corp. suffered a loss of $3.9 million in its latest quarter despite a slight uptick in revenue, the Indianapolis-based media company announced Thursday.

The loss, in the three months ended May 31, compared to a $11.9 million profit during the same period of fiscal 2009. Last year's profit, however, came after Emmis realized $31.9 million in gains by purchasing $78 million of its own debt for about $45 million through a series of one-time Dutch auction tenders.

Emmis' quarterly revenue during the most recent quarter hit $60.3 million, up from $59.8 million during the same period a year ago.

Quarterly revenue from radio operations for Emmis was $44.4 million, up from $43.5 million during the same period in 2009. Publishing revenue was down to $15.9, from $16.3 million a year ago.

A major reason for the revenue uptick and profitability was major cost cutting measures employed by Emmis, which has radio stations and magazines in markets nationwide including Indianapolis, Los Angeles, New York, Chicago and Austin, Texas. New York, Indianapolis and Austin were especially strong markets this quarter for Emmis during the first quarter.

Emmis cut expenses to $56.5 million during the quarter compared to $66.2 million during the same quarter a year ago.

“The economy is coming back slowly and so is the advertising market, and I think Emmis performance is indicative of that,” said Robert Unmacht, principal of iN3 Partners Inc., a Nashville, Tenn.-based media and investment banking consultancy. “This most recent earning report was fair, or maybe a little better. I wouldn’t call it a runaway success. But I do expect them to keep trending up this year.”

Unmacht said Emmis would have done even better this year if recent format changes at its stations in New York and L.A. had gone better and the company hadn’t lost a license to its Radio Slager license in Hungry. The Hungry license case, radio sources said, was an instance of government favoritism to another radio operator.