-By Katy Bachman

Lamar Advertising, the nation’s third largest outdoor media company, reported third-quarter earnings Thursday (Nov. 5) that beat analyst expectations and offered plenty of optimism that a turnaround was underway in outdoor advertising.

Third-quarter revenue was down 13 percent to $271.8 million, two percentage points better than the projected decline of 15 percent. For the first nine months, Lamar’s revenue was down 13.6 percent to $793.8 million.

“The worst is behind us,” said Sean Riley, chief operating officer and president, who added that the company expected to end the year down 7 percent. “We’re seeing a little less erosion in rates than usual.”

“During the third week of August, contract activity showed improvement. We’re starting to see a trend,” added Keith Istre, treasurer and CFO of Lamar.

Lamar’s 1,135 units are leading the recovery at the company, down in the upper single digits compared to the company as a whole. “It’s recovering quicker than our other products,” Riley said.

Digital is quickly becoming a larger portion of revenue, about 10 percent on a monthly basis. In third quarter, digital revenue was $24 million.

Though upbeat about the business going forward, Riley cautioned that it was “too soon to tell” how it might shape up for 2010.