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Lamar Advertising Co. (LAMR - Analyst Report) reported strong fourth quarter 2013 results with earnings of $10.1 million or 11 cents per share coming in higher than the $7.8 million or 8 cents per share in the year-earlier quarter. The robust year-over-year increase in earnings was primarily attributable to top-line improvement. The reported earnings, however, missed the Zacks Consensus Estimate by 4 cents.

For full year 2013, Lamar’ net income improved significantly to $39.8 million or 42 cents per share from $7.5 million or 8 cents per share in the previous year. The superior yearly performance was attributable to higher revenues for the reported year and significant loss on extinguishment of debt in 2012.

Net revenues for the reported quarter were $320.4 million compared with $306.6 million a year ago. The reported quarterly revenues exceeded the Zacks Consensus Estimate of $317 million. For full year 2013, Lamar reported revenues of $1,245.8 million compared with $1,179.7 million in 2012.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the reported quarter were $145.0 million, up from $136.9 million in the comparable period last year. For full year 2013, adjusted EBITDA increased 6.6% year over year to $545.1 million.

Cash Flow & Balance Sheet                      

Lamar had liquidity of $126.2 million at year-end 2013, of which $93.0 million was available under its $250 million revolving senior credit facility and $33.2 million in cash and cash equivalents. Subsequent to the quarter, Lamar amended its revolving credit facility to increase the borrowing capacity from $250 million to $400 million. The company also extended the maturity date of the credit facility to Feb 2019. Lamar had a long-term debt of approximately $1.9 billion exiting the fourth quarter of 2013.

Free cash flow in the reported quarter improved 16.3% year over year to $85.0 million. For full year 2013, free cash flow increased 14.8% year over year to $303.6 million.

Guidance

For the first quarter of 2014, management expects net revenue in the range of $290 million to $293 million, rising 1% to 2% on a pro-forma basis.

Share prices of this outdoor advertising company increased 3.1% to $51.62 following the earnings release. The gain came on the back of a revenue beat and modest outlook for the ongoing quarter.

Lamar currently has a Zacks Rank #3 (Hold). Other players in the industry worth considering include Millennial Media Inc. (MM - Snapshot Report) with a Zacks Rank #1 (Strong Buy), and Publicis Groupe SA (PUBGY) and Marin Software Incorporated (MRIN - Snapshot Report), both holding a Zacks Rank #2 (Buy).

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