The sale of Los Angeles radio station KPWR-FM helped Emmis Communications Corp. turn an unusually high profit in the second quarter.
The Indianapolis-based media company on Thursday reported a profit of just under $70 million, or $5.69 per share, in its fiscal second quarter ended Aug. 31. That’s up from $335,000, or 3 cents per share, in last year’s second quarter.
The $82.8 million sale of KPWR “Power 106” to Meruelo Group closed Aug. 1.
KPWR, a hip-hop station, has long been at or near the top in the L.A. market in terms of audience size, according to Nielsen Media Research data. Emmis had owned the station for 32 years but sold it to ease its debt obligations.
Emmis said net proceeds of $73.6 million from the sale were used to reduce credit-facility term loans almost in half, to $74.4 million at the end of the quarter.
Emmis reported quarterly revenue of $42.8 million, down from $58.8 million a year ago.
Revenue declines were expected because Emmis sold off five radio stations and most of its publishing assets over the past year.
In addition to KPWR, the company sold four Terre Haute radio stations in January for $5.2 million.
Radio revenue fell to $41.8 million in the quarter, down from $46 million a year ago. Emmis said radio revenue rose 2 percent on a pro-forma basis as its stations in New York, St. Louis and Austin, Texas, gained market share.
Quarterly publishing revenue dropped from $12.6 million to $846,000. Emmis sold Texas Monthly magazine for $25 million in November and a package of four city magazines (Atlanta, Cincinnati, Los Angeles, Orange Coast) for $6.5 million in February, leaving it with Indianapolis Monthly as its only magazine.
Revenue from emerging technologies, which includes NextRadio, rose from $183,000 to $238,000.
Emmis CEO Jeff Smulyan continued to emphasize the importance of FM chips in Apple phones getting activated to ensure growth for NextRadio.
He said NextRadio usage jumped sharply after streaming versions for Android and Apple devices launched in July.
“And in the wake of the destruction caused by Hurricanes Harvey, Irma and Maria, Federal Communications Chairman Ajit Pai and other industry leaders have publicly called upon Apple to activate the FM chips inside iPhones,” Smulyan said. “Apple is the only major device manufacturer yet to do so. We remain optimistic they will see the public safety necessity of this step.”
Emmis shares ticked up 4 cents Thursday morning, to $3.53 each.