Arbitron Inc. Reports Operating Results (10-Q)
Arbitron Inc has a market cap of $1.06 billion; its shares were traded at around $36 with a P/E ratio of 18.9 and P/S ratio of 2.5. The dividend yield of Arbitron Inc stocks is 1%. Arbitron Inc had an annual average earning growth of 2.5% over the past 10 years. GuruFocus rated Arbitron Inc the business predictability rank of 2-star.
Highlight of Business Operations:Historically, our quantitative radio ratings services and related software have accounted for a substantial majority of our revenue. For each of the three-month periods ended March 31, 2012, and 2011, our quantitative radio ratings services and related software accounted for approximately 96% of our revenue. Approximately 84% of our total revenue for the three-month period ended March 31, 2012, was derived from local radio ratings services, of which approximately 65% was from the PPM Markets and 35% was from our Diary markets.
We depend on a limited number of key customers for our ratings services and related software. For example, in 2011, Clear Channel represented approximately 19% of our total revenue. Additionally, although the amount of revenue associated with customer contracts expiring in 2012 is lower, as compared to historical standards, if one or more key customers do not renew all or part of their contracts as they expire, we could experience a significant decrease in our operating results.
Revenue. Revenue increased by 5.5% or $5.5 million for the three-month period ended March 31, 2012, as compared to the same period in 2011. PPM-based ratings service revenue increased by $5.5 million primarily due to contracted price increases in all PPM Markets.
Cost of Revenue. Cost of revenue increased by 3.9% or $1.8 million for the three-month period ended March 31, 2012, as compared to the same period in 2011. Cost of revenue increased primarily due to a $1.0 million increase in aggregate costs associated with address based sampling, in-person recruiting and cell-phone household recruiting. Cost of revenue also increased by $0.8 million during the three-month period ended March 31, 2012, as compared to the same period in 2011, due to incremental costs associated with our cross platform initiatives, as well as costs incurred related to Arbitron Mobile, which was acquired in July 2011.
EBIT and EBITDA increased by $2.3 million and $2.7 million, respectively, for the three-month period ended March 31, 2012, as compared to the same period in 2011, primarily due to an increase in PPM service revenue.
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