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Media General Broadcasting Profits Sink, No Split-Up Plans

Media General, which runs newspapers, television stations and Web sites, reported third-quarter results Thursday morning, revealing a 26% profit decline in its broadcast division.

The company also said it has no plans to split up its newspaper and broadcasting businesses.

Media General, which owns 23 television stations, showed a $16.2 million profit from its broadcasting division on revenues of $91 million. Revenues were down 3.5% from the same quarter a year ago. The declines in this segment were attributed to tough comparables tied to an off-election year.

Political-advertising revenues were $2.5 million in the third quarter of this year versus $11.5 million for the same period a year ago. The company said this year’s political-related revenues included spending on presidential and image campaigns in Florida and South Carolina, adding that local times sales rose 3.2% in the quarter while national time sales rose 10.3%.

Looking ahead to the fourth quarter, the company expects local time sales to increase but said it will not be able to match the $34 million in political revenues logged in the fourth quarter of 2006.

On a consolidated basis, Media General’s revenue slid 4.5% to $230.5 million and its net income for the quarter was $2.5 million, or $0.11 per share, well over consensus estimates of $0.06. Earnings for Q3 2006 were $20.6 million, or $0.87 per share, but included income from CBS-affiliated stations that were sold last year. Income from continuing operations for that quarter was $7.7 million, or $0.33 per share.

The publishing segment profit was down 7.4% to $22 million. Publishing revenues were down 6.7% to $131.5 million led by an 8.3% drop in newspaper-advertising revenues. The company recorded declines of 16.1% in classified-ad revenue, 8% in national ad revenues and less than 1% in retail revenues. Circulation revenue in the fourth quarter declined by less than 1%.

Media General’s interactive division recorded revenues of $9.7 million, a 32% increase from the same quarter a year ago. The $3.4 million loss in the segment in Q3 was largely to a $2.3 million investment write-off.

Media General is one of several companies speculated as candidates to split up its different business lines, as Belo and E.W. Scripps recently announced. But as Gannett did Wednesday, Media General said Thursday that it has no plans to separate its newspaper and broadcast businesses.

In its earnings release, the company stated, “Customers and shareholders alike benefit from the company's focus on being the local multimedia leader in strong growth markets, principally in the Southeast. Media General's integrated presence in print, broadcast and on the Web enables the company to produce better journalism, deliver a higher-quality product, draw more audience and improve its market position better than it otherwise could.”