Chancellor stock rises after 4th-quarter gains
Marcus to proceed with LIN; Capstar mergers
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Adjusted for the timing of acquisitions, net revenues rose 15.1% to $408.2 million, while broadcast cash flow (earnings before interest, taxes, depreciation, amortization, overhead and other nonrecurring charges) increased 24.2% to $201.6 million.
Chancellor also reported a net loss of $33.0 million, which it mostly attributed to noncash depreciation, amortization and interest expense.
The loss, about 15% greater than that expected by a consensus of analysts, compared with a deficit of $31.6 million in the year-earlier quarter.
Chancellor's results for the quarter ended Dec. 31, came on the heels of a 5-point drop in the company's stock price on Wednesday.
Much of that decline was attributed to a report released by SG Cowen analyst Ed Hatch, who lowered his cash-flow estimates for Chancellor through the year 2001. The analyst, who nonetheless maintained a "strong buy" on the stock, did not return a phone call seeking comment.
Last month, Chancellor, in which Dallas-based buyout firm Hicks, Muse, Tate & Furst maintains controlling interest, shocked Wall Street by announcing it would consider a sale of its radio, television and outdoor-advertising assets.
The company said its motivation for doing so was to elevate its stock to a price comparable to its competitors.
In an update Thursday, president and CEO Jeffrey A. Marcus said that, in addition to retaining BT Alex Brown Inc. to explore strategic alternatives, Chancellor will work with: Hicks, Muse; Morgan Stanley Dean Witter; Goldman, Sachs & Co.; Greenhill & Co.; and Chase Securities Inc.
"Notwithstanding the strategic alternative review and work with our advisors, we intend to proceed with the previously announced LIN Television and Capstar Broadcasting mergers," Marcus said.
