Hearst-Argyle takes hit

After the stock market closed on Friday, Feb. 9, Hearst-Argyle Television (HTV) warned analysts and investors that first-quarter revenue will be down between 9% and 13% and that would translate to a loss of five to eight cents per share, or between $46 million and $74 million.

Wall Street didn't like the news and took 4% off of HTV's stock price over the first three days of last week. It closed Wednesday at $21.30.

Thanks to almost $34 million in political advertising, Hearst-Argyle Television was able to report a $10 million pro forma revenue gain, or 5%, to $202.4 million for the fourth quarter. Without that political money, the company probably would have recorded a single-digit decline in revenue.

For the full year 2000, the company reported a 6.7% revenue gain, to $740 million.

Assessing the company's prospects, Merrill Lynch media analysts Jessica Reif Cohen and Keith Fawcett concluded, in a recent report, that the best way to view HTV is "over a two-year smoothing period" that considers the biennial swings in political and Olympic revenue. For the next two years, the analysts estimated, HTV will probably show pre-tax earnings growth in the 8%-to-10% range.