Lamar (LAMR) just reported a miss on its fourth- quarter earnings but earnings aren't the best metric to judge this company by, so I want to give you my take on the story here. I'm not taking any action in this Alert.
For the quarter, Lamar reported net income of 7 cents per share on revenue of $287.1 million. Earnings came in 2 cents shy of the consensus analyst estimate, while revenue was slightly higher. Looking forward, the company guided for $274 million in revenue for the first quarter, which is in line with the consensus expectation.
On top of its earnings release, the company also announced a special dividend of $3.25 and a $500 million share repurchase plan. I expected the buyback, because this company historically has been very aggressive in buying back shares, but I want to hear the rationale behind the special dividend. I'll have more on this for you later.
At first glance, the results look fine to me, and I am very pleased with the new buyback and dividend. Lamar has been very aggressive in returning capital to shareholders, partially financed by debt issuance, and I view this as a huge positive for shareholders. The conference call begins at 11 a.m. EST. I'll listen intently, especially to the company's comments on the digital billboard market. Look for another Alert from me later today on this.
This position is about 3.5% of the portfolio, so there's room to buy more, but I won't know for sure what I want to do until after the call.
Regards,
James J. Cramer
DISCLOSURE: At the time of publication, Cramer was long Lamar Advertising.
Send email to james.cramer@thestreet.com.