Gilford Securities Comments On 23 Percent Surge In Auto; Plus For Nexstar

According to Gilford Securities, Nexstar Broadcasting NXST saw auto surge 23 percent in Q1. Gilford Securities reported that in Q1 2011 and beyond, TV Stations Groups should benefit from auto, its top ad category, continuing to surge at 23.4% yr/ yr in substantially higher spending despite decreased avg. ad rates of 6.7%, easily overwhelmed by higher inventory sell-through at 31.4% in top 50 markets. This growth was achieved even though it compared against prior year's Q1 46.3% auto rev. increase. “Across two years, auto advertising in top 50 markets soared 80.5% from $560.7MM to $1,011.8MM. Also, auto TV spots sold were up a remarkable 106%, as TV stations drove rev. by much higher inventory sell-through rather than raising ad rates, yet. Typically, media drive sell-out first, before boosting rates once they've returned to more normalized sell-through. In Q1 2010, TV stations saw auto ad spending bounce off of recession trough by growing 46.3% yr/yr in dramatically higher auto investment despite lower avg. ad rate of 6.1%, which was overwhelmed by massively higher inventory sell-through at 56.7%.” Nexstar Broadcasting closed yesterday at $7.68.