Cox Radio Shares Decline on 1Q Trends

Cox shares fell 26 cents, or 2.3 percent, to $11.05 in afternoon trading. During the past 52 weeks, the stock has fallen from a high of $15.77 last April to a low of $10.36 on Jan. 23.

On Wednesday, the Atlanta-based company said its fourth-quarter loss narrowed as it recorded a lower charge to write down the value of certain properties. But in a conference call following the release, Cox President and Chief Executive Robert Neil said advertising revenue fell in January and is pacing down in March. Advertising revenue increased in February.

Goldman Sachs analyst Mark Wienkes said Cox's fourth-quarter results exceeded expectations, but expressed concern about the first-quarter outlook.

"Given the uninspiring company pacings and the uncertainty surrounding the pending rollout of (Portable People Meter) through the industry, we remain skeptical that ad dollars will grow in 2008, and are waiting for evidence of sustained industry growth in order to turn more positive on the shares," said Wienkes, who maintained the company's "Neutral" rating.

Arbitron Inc.'s Portable People Meter, or PPM, is an electronic system for capturing listening habits that aims to replace the diaries used now.

Wienkes also said that the company's 2008 expense outlook implies mid-single-digit expense growth in the first quarter.

Wachovia Capital Markets analyst Marci Ryvicker also noted that the company's Internet advertising has slowed.

"Cox has one of the best management teams in the media space, in our opinion, and is performing better than its peers on a fundamental level," Ryvicker said. "However, we do not see any near-term catalyst (other than a potential buyout by Cox Enterprises) that will boost the stock given the general weakness of traditional advertising and radio in particular."