Lamar Advertising Co's
) Albany based transit advertising entity, Lamar Transit
Advertising recently announced that it has been awarded an
advertising contract from Albany International Airport.
Within a tenure of five years the Albany International Airport
is expected to earn approximately $800,000 revenue from the
venture. Additionally, it will also receive 45% of Lamar Transit's
advertising revenue produced within these five years.
Under this pact, Lamar will focus more on improving Albany
International Airport's display advertising entity and raise its
revenue through its inventive strategy. Consequently, this
initiative will usher in enormous opportunities for the airport's
display advertising to grow in future. Lamar is estimating that the
sales from advertising will reach $700,000 in the first year and a
whopping $1.4 million at the end of contract period.
The company's comprehensive range of media services helped it
become a leading provider of outdoor advertising. Lamar's pro forma
net revenue jumped 4.1% annually to $266.2 million in the first
quarter of fiscal 2012. Alongside, the company has a large and
growing presence in the transit-related advertising market. In the
first quarter of fiscal 2012, Lamar had 1,478 digital displays
including 789 bulletins and 689 posters.
At the same time, it is noteworthy that Lamar operates in a
highly competitive and fragmented outdoor advertising and media
market, wherein lies the risk of clients shifting their
accountability to other services. Their shift in loyalty may result
in the loss of market share, thereby diminishing profits. The
company faces intensified competition from peers like
Clear Channel Outdoor Holdings Inc.
Focus Media Holding Ltd.
The current Zacks Consensus Estimates for Lamar are 15
cents and 19 cents for the second quarter of 2012 and for fiscal
2012, respectively. The company currently holds a Zacks #3 Rank,
which translates into a short-term 'Hold' rating (1-3 months). We
currently maintain a long-term 'Neutral' recommendation on the
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