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Lamar Advertising Company (LAMR - Analyst Report) reported its financial results for the first quarter 2012 on May 3. Results were weak as the company reported a loss per share of 25 cents in the quarter as compared to a loss of 14 cents in the year-ago quarter. Results plummeted due to losses incurred on debt retirement.

First quarter loss also surpassed the Zacks Consensus Estimate of a loss of 14 cents.

Revenue

Pro forma net revenue jumped 4.1% year over year to $266.2 million in the quarter and registered a reported growth of 4.3%. The results were above management’s revenue guidance of $264 million and pro forma growth forecast of 3.0%.

Income/Expenses

Direct advertising and G&A expenses in the quarter were $154.7 million, up 3.5% year over year on a pro forma basis. As reported, operating income modestly increased year over year to $25.8 million.

Interest expense dipped 8.5% year over year to $39.9 million in the quarter due to a lower debt level. Adjusted EBITDA in the quarter stood at $99.8 million, up roughly 4.9% year over year.

Balance Sheet

Exiting the first quarter, Lamar Advertising had cash and cash equivalents of approximately $35.9 million as compared with $33.5 million in the previous quarter. Total debt, including current maturities increased to $2,187.6 million from $2,158.5 million in the previous quarter.

Cash Flow

In the first quarter 2012, cash flow from operating activities was approximately $36.7 million, up 42.1% year over year. Capital spending dipped 31.5% in the quarter to $19.7 million, of which the company expended roughly 65.7% on upgrading its billboards business while the rest was spent for logo, transit, land and buildings, and operating equipment businesses.

Free cash flow was $44.2 million, up from $26.7 million in the year-ago quarter.

Outlook

For the second quarter of 2012, management expects net revenue to be approximately $303.0 million and up roughly 3.0% on a pro forma basis.

Lamar Advertising Company is one of the largest owners and operators of outdoor advertising structures in the U.S. It provides advertising services to restaurants, retailers, automotive, real estate, health care, gaming, service, hotel and motel, telecommunication, and amusement industries, including entertainments and sports. The company faces stiff competition from Clear Channel Outdoor Holdings Inc. (CCO - Snapshot Report) and CBS Outdoor.

The stock currently bears a Zacks #3Rank (Hold).

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