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Earnings: EW Scripps Swings To Loss; Cuts 400 Jobs; Online Newspaper Revs Fall 12 Percent
With the first quarter that has EW Scripps (NYSE: SSP) reporting as a separate company from Scripps Interactive (NYSE: SNI), the newspaper/broadcaster said it will suspend its dividend payment to give it more flexibility as economic conditions worsen. The company also said about 400 newspaper jobs will be cut in restructuring due to be completed in Q4. As for Q3 results, EW Scripps swung to a loss from continuing operations of $21.0 million ($0.39 per share) compared with income of $16.6 million ($0.31 per share). The loss was due largely to costs related to the separation of the Scripps Networks and interactive media businesses totaling $22 million, as well as a $24.9 million non-cash charge to further write down the investment in its Denver newspaper partnership. Weakness in advertising drove the Cincinnati company's revenues down 9 percent to $230 million from $253 million the year before.
-- Newspapers' online revs fall: Revs fell 17 percent to $131 million. Ad revenue was down 20 percent to $101 million. And in a rare but growing occurrence, online revenues dropped 12 percent to $9.1 million. The decline in web revs were attributed to print upsells in classifieds, a sales model that newspapers like McClatchy (NYSE: MNI) and Gannett (NYSE: GCI) have been working actively to move away from in hopes of growing online.
-- Staff reductions: Excluding the cuts announced today, Scripps says its newspaper workforce already has been reduced 13 percent since 2006. By the end of 2008, the employee count for newspapers will be under 4,000. Scripps estimates a $5 million related charge in Q4.
Release (PDF) | Webcast (10:00 AM EDT)
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Earnings: Cablevision Swings To Profit In Q3
Cable companies are expected to face a double-edged sword as the economy worsens, the thinking goes: consumers will be staying home more, making cable services like VOD more valuable to them, yet at the same time, squeezed wallets might force as many consumers to cut back on additional offerings. It's still too early to see those dynamics play out, but Cablevision (NYSE: CVC) swung to a profit of $27.1 million ($0.09 per share) in Q3 compared to last year's $79.3 million net loss. Although it's doing better than last year, profits fell short of the $0.14 EPS analysts polled by Thomson Reuters (NASDAQ: TRIN) had expected, AP reported.
On the revenue front, the cable operator's net revenue grew 15.4 percent to $1.745 billion, which was attributed to positive activity in the telecommunications Services, Madison Square Garden businesses, as well as the addition of Newsday, which saw $73.5 million in revs, and the Sundance cable channel. The revenue numbers exceeded analysts' projections of $1.6 billion.
-- Cable Television net revenues rose 9.8 percent to $1.247 billion, while AOCF was up 13.6 percent to $489.7 million as operating income gained 32.9 percent to $281.2 million. Still, it looks like the economy—or perhaps competition from Verizon (NYSE: VZ) FiOS—is starting to cut in to subscriptions, as basic video subs are down 19,100, or 0.6 percent, from June 2008; subs were also down 9,900 or 0.3 percent from September 2007.
-- While video subs slipped modestly, high-speed data customers were up 31,600 or 1.3 percent from June 2008 and 207,700 or 9.4 percent from September 2007
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Earnings: AH Belo's Online Revenues Declined 19 Percent
Newspaper companies used to be able to count on their internet units as a bright spot. Not anymore. AH Belo (NYSE: AHC) (NYSE: BLC), the newspaper half of the old Belo Corp., saw its online revenues drop for the second consecutive quarter, as internet ad dollars fell 19 percent to $11.4 million in Q3. Online's share of AH Belo, publisher of the Dallas Morning-News and two other papers, is now 7.4 percent of the publisher's total revenues.
Overall, AH Belo posted $153.8 million in revenues—a 15 percent decline—and a net loss of $17.3 million ($0.84 per share) in Q3. The loss was attributed to $11.1 million in expenses related to staff buyouts. Ad revenue, including print and online, was down 22 percent, mostly due to classifieds, a sore spot at most newspapers these days. Circulation revenue, which has been in decline across most newspapers recently, actually grew in Q3, as AH Belo said it was up 12 percent.
Release | Webcast (10:00 AM EDT)
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Earnings Call: Gannett Expects More Declines On The Print Side, But Digital Growth Looks Stronger
Things are so bad in the newspaper industry and the economy at large that Gannett (NYSE: GCI) is suspending the monthly revenue reports, said Gracia Martore, the company's CFO, during the morning earnings call. Later on, that drew a sharp rebuke from Barclays' Craig Huber, who questioned discontinuing the updates during a time of such volatility. "You publish newspapers—would you stop publishing newspapers because of a series of bad news? Investors need this information." In response, Martore said the suspension of monthly revenue reports weren't a reaction simply to "bad news," and said the company would consider changing its mind on that at some point.
The call began with a review of the the pain afflicting newspapers. From the dismal housing market to the global financial crisis, Gannett CEO Craig Dubow said that the difficulties in many of the markets and regions the company operates in will only accelerate the drive to build up its digital business.
Apart from the poor Q3 showing—as reported earlier, net income plunged 32 percent to $158 million ($0.69 per share) and revs slid 8.9 percent to $1.64 billion—Dubow noted that the shifts in the newspaper business and the slumping economy pushed real estate and employee classified ads down for most of its segments. That said, digital has remained a bright spot, he said. The digital segment brought in $77.5 million in revenues in Q3, compared to just $17.1 million the year before, and broadcasting's online revenue was up 15 percent. Considering the slowdown in online ads, the double-digit growth is either proof of the company's new focus on its web extensions, or a statement of how far behind it was last year. Perhaps a bit of both.
Asked about trends on the print side during the Q&A, Dubow said there hasn't been much change—in other words, more and more declines. As for details about particular categories, auto ad spend, retail, packaged goods and telecom have been down significantly, with autos in the double digits.
As for acquisitions, Dubow and Martore indicated that it's unlikely that Gannett would mainly be looking to increase its stakes in companies in which it already has holdings, as opposed to looking for new purchases. Martore "It would be a continuation of what we did this past quarter, such as buying up the controlling interest in CareerBuilder and acquiring all the stakes in ShopLocal, which we knew would result in expense synergies by aligning it with PointRoll."
Release (PDF) | Webcast (10:00 AM EDT) | Transcript
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Earnings: Gannett Q3 Profits Drop 32 Percent; Revs Slide 8.9 Percent
Gannett's profits and revenues were down again in Q3, with total operating revenues slipping 8.9 percent to $1.64 billion from last year's $1.80 billion. Net income meanwhile fell 32 percent to $158 million ($0.69 per share) from Q307's $234 million ($1.01 per share), reflecting the woes its newspaper peers have been experiencing lately as revenue from ads and circulation plummet and the company acts to rein in costs. Gannett (NYSE: GCI) recently said it would eliminate 1,000 staff positions, including 600 layoffs, for a 3 percent reduction in its workforce. Analysts estimates gathered by Thomson Reuters (NASDAQ: TRIN) expected the USA Today parent to post a gain of 75 cents per share and revenue of $1.61 billion, AP reported in its earnings preview.
-- Digital: While noting the trouble on the print side, Gannett's earning statement attempted to highlight some of the more positive news on the digital front. Like most newspaper companies who are still experiencing growth from their respective internet properties—albeit at a slower rate, these days—digital revenue ballooned to $77.5 million in Q3 from $17.1 million. Again, impressive numbers, but certainly not enough to stanch the losses elsewhere. As for a review of some of Gannett's digital moves during the quarter, the company acquired all of its partners' ownership stakes in comparison shopping site ShopLocal and took an additional 10 percent stake in CareerBuilder, increasing its ownership to 50.8 percent. While the company publishes 100 websites, mostly related to its newspaper and broadcast properties, the real money makes were CareerBuilder, along with ShopLocal and rich media ad firm PointRoll.
-- Publishing: Publishing segment operating revenues were $1.36 billion for the quarter, a 14.4 percent decline from Q307. Ad revenues were $977.1 million compared to last year's $1.19 billion in the third quarter of 2007. Also typical of its larger peers like McClatchy (NYSE: MNI), the fall in classified revenues were driven by declines of 41.5 percent in real estate, 34 percent in employment and 21.4 percent in automotive. Overall, advertising revenues were 17.6 percent lower.
-- USA Today: Gannett's flagship saw ad sales decline 7.1 percent in Q3 compared to the year ago quarter. Paid advertising pages totaled 713 compared with 803 in the same quarter of 2007.
Release (PDF) | Webcast (10:00 AM EDT) | Transcript
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Earnings Call: NYTCo Exploring Dividend Cuts; Would Slashing Family Payout Cause Unrest?
The New York Times (NYSE: NYT) board of directors may cut the company's dividend—and with it, payments of millions of dollars to members of the Ochs-Sulzberger families. The company has been criticized for paying substantial dividends but when asked what prompted the discussion, CFO Jim Follo played down possible catalysts: "This is a fairly dynamic discussion. This is a discussion that takes place every board meeting on how to allocate capital, what we see in the future as far as investment opportunities." During his prepared remarks, Follo said the company is reviewing its uses for cash, exploring finance alternatives and considering other measures. Follo said the dividend decision would be made "before the end of this year to determine what is prudent in light of the overall market conditions." Would the board cut the dividend in half or take it to zero? A non-answer answer. The current dividend is 23 cents a share with the family getting about $25 million.
The better question: Would a cut cause the Bancroft-Pulitzer kind of family unrest Arthur Sulzberger has been able to avoid until now and produce some breaking in the ranks by those who would rather get money through a sale if they aren't getting it through dividends?
Earnings | Webcast (11 AM ET) | Transcript
Highlights from the call after the jump…
Some color from the call when it comes to online:
-- Online advertising: Martin Nisenholtz, SVP, digital operations: "It isn't really a uniform story at all across the four segments." Lower-end display is weaker, higher-end—nytimes.com site as opposed to About inventory-- is holding.Classifieds continue to be dragged down by reduced help wanted ads. Nisenholtz said the company holds rates, rather than discount inventory just to sell it. CPMs at nytimes.com are up in single digits; ad networks also are up year to date. CEO Janet Robinson said it is too early to tell if clients are pulling back on contracts because of the way money is usually spent across a year but overall Scott Heekin-Caneday, president and GM of the New York Times, said advertisers are taking a wait-and-see attitude. Heekin-Canedy: "They're trying to spend their ad dollars very judiciously ... and waiting as late in the year as possible to set ad budgets for 2009."
-- About.com: Nisenholtz said the growth rate has slowed at About.com this month as a result of the non-premium display side of the business but that growth in cost-per-click and lead gen is showing "very robust growth." In an exchange illustrating how much NYTCo's revenue mix has changed, analyst Scott Davis asked some questions about the cost side, then added: "It seems like a small issue but, sadly, About's profitability is becoming a fairly big piece of the company." Investments in About China will continue.
-- Traffic report: The financial crisis may be causing concern on the ad side but it's been very good to the traffic at nytimes.com, which also is benefiting from the high interest in the presidential election. Unique visitors from the U.S. to nytimes.com totaled 20.1 million, up 37 percent from September '07—with an audience 30 percent larger than the next newspaper web site. The expansion of online business coverage started in September with a revamp of the technology section and a new economy section, dovetailing with the escalation of interest in financial news. In coming months, Robinson said the site will expand small business, personal technology and Your Money, "introduce more journalists, deepen coverage in its DealBook franchise," and add multimedia and tools. Page views for business were up 66 percent over last year; the new economy section had nearly 4 million page views last month. The site itself has three of its all-time record days the week of Oct. 5. The company's sites overall drew 50.18 million uniques in September, up 15 percent year over year. It claims a reach of 31 percent of the U.S. online audience.
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Earnings: Journal Communications' Q3 Loss Widens, Revs Fall 5.6 Percent; Interactive Up 16 Percent
Apparently, being small and local isn't any kind of safe haven for newspaper companies these days. While Journal Communications' total interactive revenue was up almost 16 percent in Q3, as remains typical among its larger newspaper publisher peers, it was not enough to counter the losses on the on the print side. The Milwaukee company's Q3 revenue was $136.3 million, a 5.6 percent decline compared to $144.4 million last year. Journal Communications' net loss grew to $17.1 million during the period, compared to Q307's $13.1 million.
The publisher of the Milwaukee Journal Sentinel—its only daily, as Journal Comm owns a few weekly community papers—said interactive ad revenue at the newspaper rose 14.1 percent to $3.8 million compared to Q307's $3.4 million. Overall, publishing revenue fell 8.8 percent to $59.4 million. Broadcast revenue was basically flat at $54 million, while revenue at its radio properties was down 3.3 percent to $21.7 million. As a publisher, Journal Comm is hardly comparable to companies like McClatchy (NYSE: MNI), which swung to profit in Q3 and the NYT, which earlier today reported a loss for the quarter, but the pressures all are facing remain the same, even as interactive becomes a larger part of their operations.
-- On Yahoo APT: During the conference call, Journal Comm COO Elizabeth Brenner, noted that the company was trying to reduce print upsells to online—much like McClatchy, Gannett (NYSE: GCI) and others have been focusing on—and said that Yahoo's new ad targeting and delivery platform APT got off to a good, albeit slow, start last month, producing $40,000 in revenue for its daily paper in September. That represented a small contribution to the Journal Sentinel's 13.8 percent rise in total interactive ad revs $1.37 million last month. September revenue release.
Release | Webcast (12:00 PM EDT) | Transcript
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Earnings Call: McClatchy: Q3 Revs Brought Down By Real Estate And Autos; Sticking With AP
The real estate downturn has had a wider effect on The McClatchy (NYSE: MNI) Company's ad revenues apart from just lower classified dollars coming in. As chairman and CEO Gary Pruitt explained at the start of the company's Q3 conference call, anything related to purchases for the home, such as furniture and department stores, all pulled back on advertising. Nothing that the ad market remains weak, Pruitt ticked off the print declines and the online revenue growth—with employment ads being a particular exception.
-- Retail was down 12.6 percent, while online, the category grew 89 percent.
--Classifieds were down 30.1 percent. Employment ads fell 40.8 percent, while online revs were down 29 percent. Asked how much is cyclical versus secular, Pruitt said, "Secular pressures are greatest in classified, but the majority of the decline is cyclical and therefore, temporary. But it might get worse, before it gets better. California got into this recession first and we are seeing different results in different markets. We won't see a significant rise of classified in a recovery, but classified display will pick up."
-- Autos were down 21 percent, online was up 28.7 percent, as dealers shifted spending. During the Q&A, Wachovia analyst John Janedis asked for some specifics about dealership closings. Pruitt said the fall has been gradual, but not precipitous. "We do expect our Cars.com to continue to take advantage of the shift from print to online."
-- Real estate dropped 36.5 percent; online gained 18.3 percent
-- National ads fell 18 percent. Pruitt said online was up, but didn't offer specifics.
-- Moving away from print upsells: Pruitt: "We have been focused on becoming a hybrid digital and print company for some time. We are building out online ad sales in their own right, as 52 percent of internet ads were not tied to print upsells and were sold directly. Online advertising continues to remain the fastest growing part of our business." More after the jump
Release | Webcast (12:00 PM EDT)
-- Any asset sales planned? It's a tough market to sell newspapers, but Pruitt said "We like our portfolio and we think we're operating in the right places in the right way. We don't comment or speak about potential asset sales of any kind, as we feel it sparks speculation. But we constantly evaluate our assets in good times and in bad times."
-- Sticking with AP: Asked about the recent two-year cancelation orders issued among some AP members—including, most recently, Tribune Company --over the changing pricing structure, Pruitt said McClatchy has signed a new deal with AP and was pleased with the rate reduction. That doesn't mean our editors don't have issues, but we are not part of the group that issued cancelations of memberships. And we don't plan to.
-- On Yahoo: The new APT targeting and ad delivery system is still a little too new for the company to extract any results. Nevertheless, Chris Hendricks, VP, interactive media, claimed that McClatchy had best performance in the Yahoo (NSDQ: YHOO) Newspaper Consortium, both with run of site and behavioral targeting and in particular, with autos. However, you just will have to take his word for it. Hendricks: "We cannot release numbers, as we agreed with the partners not to."
-- We will have growth: In a relatively tense exchange with one analyst, who expressed extreme doubt about Pruitt's pronouncements of a return to growth once the recession eventually recedes, Pruitt tried to remain upbeat. "I'm not in the business of making economic conditions, but I can say we are making sensible decisions about costs and driving internet revenues, I can say we will have a successful future."
-- Headcount: The company had about 14,000 staffers and will down about 1,000 employees by year's end. Pruitt also told analysts to expect more job losses through attrition next year.
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Earnings: McClatchy Swings To Q3 Profit, But Revs Fall 16.4 Percent
The effects of the recession appear to have hit most sectors of the economy suddenly these past few weeks, but it's something The McClatchy Company (NYSE: MNI) and other newspaper publishers have been dealing with for some time now. But things are looking tougher, as McClatchy's Q3 net income from continuing operations came in $4.2 million, or five cents per share—half of what analysts polled by Thomson Reuters (NASDAQ: TRIN) expected, AP reported. The anticipation, on average, was that McClatchy would post profit of 10 cents per share on revenue.
Elaine Lintecum, McClatchy's treasurer, disputed that, saying it did not take into account the"unusual events" in Q3. Lintecum: "Most of the analysts will back out unusual events. Since it is a consensus of estimates, one would need to talk with each. But I am sure all backed out the impact of severance and bank amendment charges. They could not have known about the other unusual items in our earnings until we reported so could not have possibly had them in their estimates… In total they were 8 cents per share in such items. When those items are considered, our earnings were 13 cents compared to analysts 10 cents."
Apart from that, McClatchy also said revenues were down 16.4 percent to $451.6 million; Thomson Reuters analysts called for revs of $453.4 million.
The company has been trying to climb out of a deep hole, pointing out that in Q307, McClatchy posted an after-tax loss from continuing operations of $1.345 billion, or $16.40 per share. Last month, the publisher of the Sacramento Bee and Miami Herald announced a restructuring plan that it says will save $100 million annually. The plan included paring staffing levels down about 10 percent and is expected to result in severance of approximately $20 million. Of that amount, $17 million was recorded during Q3. Also in September, McClatchy renegotiated $1.175 billion of debt, which includes banks loans and available lines of credit, giving it a bit more flexibility, at least for the time being. Total debt was $2.07 billion as of September 28. Other highlights from Q3 included:
-- Online ad revenues grew 9 percent. Online made up 12.2 percent of total ad revenues, compared to 8.6 percent of total advertising revenues for all of 2007. Excluding employment ads, online ad revs were up 49.3, as the category that has been impacted both online and in print by the nation-wide decline in jobs.
-- Gary Pruitt, chairman and CEO, in a statement: "Our online business continues to be a bright spot for the company; online audiences and revenues are growing strongly. In the third quarter, average monthly unique visitors to our websites were up 43.8 percent and were up 37.1 percent through the first nine months of 2008… More than half of our online advertising came from ads placed only online; they were not tied to a print up-sell."
Release | Webcast (12:00 PM EDT)
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Earnings: Media General Reports Higher Q3 Earnings Aided By Politics, Olympics; Narrows Digital Loss
Looks like Media General (NYSE: MEG) reaped the most benefits possible from the politics-Olympics combo in Q3 but it will be a tough performance to repeat. Under fire from activist investor Harbinger and others, the company nearly tripled earnings—$6.1 million, or $.28 per share, compared with $2.5 million, or $.11 cents per share, in Q307. Analysts had higher expectations, estimating EPS of $.30, Reuters reported. Revenues dropped 10.9 percent to $193.7 million from $217 million the previous year. (The earnings release is a bit of a mess, trying to showcase results from continuing operations versus the full monty including five TV stations that "have been or will be sold.") Among the factors contributing to this quarters performance: the job cuts and other belt-tightening cut operating costs by nearly 10 percent; broadcast profits rose 24.5 percent; and the results don't include the losses from the newsprint division sold off earlier this year.
-- Interactive: A mixed bag ... revenue rose 9 percent, aided by a 29 percent increase in local advertising and a "strong performance" by DealTaker.com, acquired in Q1. But it's still in the red albeit a smaller loss: $336,000 compared with a $1 million loss last year (excluding a writedown). Some more concrete results from the Yahoo (NSDQ: YHOO) Newspaper Consortium: "the partnership with Yahoo!HotJobs generated $1.7 million in revenues in the quarter, helping to mitigate a 12 percent decrease in Classified revenues." The company attributes the local ad increases to "a continued focus on direct sales, increased staffing and training" leading to "growth in banners and sponsorships." But national and regional dropped 11 percent "due to softer advertising from national agencies, particularly at TBO.com in Tampa."
-- Warning: slow growth ahead: Blockdot's declining advergaming revenues in Q3 "reflected a slower pace of incoming projects, as a result of the weaker economy, compared with the same 2007 period."
Earnings release | Webcast (11 a.m. eastern)
-- September revs down 13.9 percent: Separate from its Q3 report, Media Gen said total company revenues came in $59.7 million versus $69.3 million the year before for a 13.9 percent drop. The Interactive Media Division, though, had revenue gains of 8.1 percent, citing 17 percent growth in local advertising and as well as revenues from DealTaker. But the online side wasn't all rosy: The division's national/regional advertising fell 22.3 percent, due mostly to weakness in the Florida market. Also, online classifieds dropped 17.5 percent overall. Nevertheless, Media Gen said Interactive generated an increase in "employment liner advertising" through its Yahoo HotJobs partnership, though no specific numbers were offered. September Revenues Release More from the earnings call after the jump.
-- Not just Yahoo: [David adds] During the call, Marshall Morton, Media Gen's president and CEO said the company was looking forward to taking advantage of Yahoo's additional display offerings. He added that the company wasn't just relying on Yahoo and is looking to online revenues to be generated by real estate ads with Zillow as well. Again, revenue numbers or specific targets were not discussed.
-- Online ad price hike?: When asked about the kinds of prices Media Gen is getting from online ads given the tougher economy, Reid Ashe, the company's COO said that some publications are more "under-priced than over priced in some markets." He added that ad rates for some of its online newspapers may go up in 2009.
-- The future: Morton said he wants Media Gen to be regarded as an "information company" as opposed to a newspaper company. Certainly, given the downward trend the industry has been facing, it makes sense to want to avoid the label. But newspapers are and will remain the core of Media Gen, Morton said. But newspapers can take on different forms. "Shrinking the size of the newspaper isn't necessarily bad. It's an option in some areas. The customers who read a full newspaper these days are few and far between. But we still have to provide the information they want. We'll look at that things like shrinking newspapers' size on a market by market basis. But what will the future look like? Newspapers have a long life, even if they're not a necessarily a printed paper delivered to the front doorstep."
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Earnings: FT Strong Despite Economy, Revenue Up 11 Percent
In times of financial crisis, one of the few things to benefit is the financial media. And that may go some way to explain why Financial Times publisher Pearson (NYSE: PSO) today reported that FT Group's revenues have risen by 11 percent in the last nine months while at FT Publishing revenues are up 14 percent with advertising revenue 1 percent ahead of 2007 on a like-for-like basis. Pearson even said it expects FT Publishing to increase profits "even if there is no growth in advertising revenues".
-- At the FT's interactive data division sales are up 8 per cent. This is a sign of the B2B data mentality mentioned of the business recently by FT managing editor Rob Grimshaw. The company is making more of its share price data and company information and using it to increase online subscriptions. Grimshaw also defended the FT's part-free online business model and said that people will pay for quality content—a sentiment these figures appear to confirm.
In a nine-month trading update today, FT owner and education publisher said its overall operating profits were up 11 percent with revenue up 8 percent. The London-based publisher, which also owns the Penguin books imprint, said its EPS was "toward the top end of market expectation" if the recent strength of the dollar against the pound continued. Analysts have predicted between 46 pence and 52 pence per share by the end of year, compared with 46.7 pence last year. As FT.com reports, CEO Marjorie Scardino said the company remained "cautious" about the global outlook but said it was in good shape to get through the turmoil.
Chrystia Freeland, U.S. managing editor for FT will be speaking at our Future of Business Media conference in NYC on Oct. 28
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Earnings: R.R. Donnelley Reverses Net Loss In Q2; Revs Gain 4.6 Percent
Print services provider R.R. Donnelley (separate from directory services company R.H. Donnelley) said Q2 net earnings from continuing operations came in $145.1 million ($0.68 per diluted share) from last year's net loss of $69.4 million ($0.32 per diluted share). Net sales in the quarter were $2.9 billion, up nearly 4.6 percent from Q207, thanks to acquisitions and favorable foreign exchange rates. Nevertheless, revenues were still held back by "continued price pressure and volume declines."
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Earnings: Washington Post Q2; Publishing In Steep Decline; Cable And Education Still Strong
The cable industry has had a strong quarter all around, and the Washington Post's (NYSE: WPO) cable unit was no exception, helping total group revenue moving upward… Company-wide revenue was up 6 percent to $1,106 billion from $1,046.8 billion in the year-ago quarter. The cable business grew 16 percent to $178.9 million. Op income was up 25 percent to $40.1 million. During the quarter the company added both digital and standard cable subscribers, and saw a major boost from high-speed data and telephony.
The newspaper story is about what you'd expect from anyone else. Revenue fell a steep 13 percent to $197.3 million. The unit reported an operating loss of $96.7 million, although this includes a $79.8 million hit due to early retirement buyouts. That being said, even backing that cost out, the unit was still in losses for the quarter, the result of the revenue decrease and higher costs. On the digital side, revenue at washingtonpost.com up just 4 percent to $29.3. Elsewhere in publishing, Newsweek saw a 21 percent advertising decline. Total magazine publishing had op losses of $3.7 million.
Of course, all of these businesses (cable, publishing, etc.) are less than half of total revenues. The Kaplan education business had revenue of $576 million, for solid, 11 percent growth, excluding acquisitions. Op income grew 26 percent to $47.4 million.
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Earning: UK's Trinity Mirror Falls On Ad Weakness, Set To Worsen
The worsening ad market saw operating profit at the UK's largest newspaper group, Trinity Mirror, fall 15 percent to £80.5 million ($159 million) in the half-year to June, despite digital revenue growing 40.2 percent to £22.3 million ($44.1 million)—an increasingly familiar pattern. Digital revenue grew 100.6 percent from a low base inside Trinity's national papers and 33.6 percent in regionals, where most publishers are seeing classifieds ads taking a pounding - ads were down three percent in January but 11.3 percent in June, and group-wide are down 15 percent so far in July.
So, whilst it's still on track to make £20 million ($39.5 million) in 2008 cost cuts, it's today announced a new round of cuts for 2009, with "at least" another £20 million due to be shaved off through better ad systems and multimedia newsroom integration. In the call, CEO Sly Bailey came out fighting with the most curious of historical contexts: "I say this to those who will write newspapers' obituary - our portfolio of iconic media brands has survived two World Wars, a Depression and multimedia… they are resilient, and will still be here… newspapers will be around for many years to come." She set a target of £100 million ($197.9 million) organic digital revenue by 2011 and doubling web users to 24 million by 2010. See PCUK's full earnings report and write-up from the analysts call…
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Earning: UK's Trinity Mirror Falls On Ad Weakness, Set To Worsen
The worsening ad market saw operating profit at the UK's largest newspaper group, Trinity Mirror, fall 15 percent to ??80.5 million ($159 million) in the half-year to June, despite digital revenue growing 40.2 percent to ??22.3 million ($44.1 million)???an increasingly familiar pattern. Digital revenue grew 100.6 percent from a low base inside Trinity's national papers and 33.6 percent in regionals, where most publishers are seeing classifieds ads taking a pounding - ads were down three percent in January but 11.3 percent in June, and group-wide are down 15 percent so far in July.
So, whilst it's still on track to make ??20 million ($39.5 million) in 2008 cost cuts, it's today announced a new round of cuts for 2009, with "at least" another ??20 million due to be shaved off through better ad systems and multimedia newsroom integration. In the call, CEO Sly Bailey came out fighting with the most curious of historical contexts: "I say this to those who will write newspapers' obituary - our portfolio of iconic media brands has survived two World Wars, a Depression and multimedia??? they are resilient, and will still be here??? newspapers will be around for many years to come." She set a target of ??100 million ($197.9 million) organic digital revenue by 2011 and doubling web users to 24 million by 2010. See PCUK's full earnings report and write-up from the analysts call???
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Updated: Earnings: AH Belo Q2 Swings To Loss; Internet Revs Fall 11 Percent; Trimming Staff By 500
Following Friday's report from sibling broadcaster Belo Corp. the newly separate AH Belo (NYSE: AHC) newspaper publisher reported earnings this morning: The publisher of the Dallas Morning-News and two other papers said revenue in Q2 fell a steep 15 percent to $163.3 million, as ad revenue was down 21 percent. Not surprisingly, classifieds were the worst performer. Net income swung to a loss of $3.2 million ($.16 per share) from $12.3 million ($.60 per share). Internet revenue stood at $12 million or 7.4 percent of the total. However the company doesn't say whether internet revenue is up or down from last year. For that you have to go to last year's report to see that online revenue was $13.6 million. So in fact, internet revenue fell about 11 percent. It's also worth pointing out that last year, internet revenues were up 19 percent, and in that period they bothered to mention the growth figure.
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Update: In a separate letter sent out to shareholders, Chairman Robert Decherd announced that the company would be instituting a voluntary severance plan in order to cut costs. In the hopes of cutting $50 million in costs, it plans to eliminate 500 positions or 14 percent of the total workforce at Belo (NYSE: BLC). Full letter (pdf).
Update 2: From the company's conference call transcript: AHCs partnership with Yahoo (NSDQ: YHOO) produced over $2.5 million through the HotJobs platform, a 125 percent increase over the same period last year.
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Earnings: Ad Slump Hits Online, As Lee Enterprises' Q2 Internet Revs Fall 9.1 Percent
The dismal economy not only hit newspaper publisher Lee Enterprises (NYSE: LEE) on the print side, but even its online ad revenues fell in Q2. Online dropped 9.1 percent, Lee said, adding that combined print and digital revenues also fell 10 percent to $195.5 million. Also, combined same property print and national online ad revenue slid 21.2 percent. This is a striking turnabout from last year, when Davenport, Iowa, publisher of the St. Louis Post-Dispatch said online advertising grew 61.2 percent to $16.2 million from $10 million in Q206. Overall, the picture was not a pretty one for Lee, though not out of the ordinary for the industry these days: Q2 net income was $12.5 million down 44.2 percent from last year's $22.4 million, while total operating revenue from continuing operations fell 8.3 percent year-over-year to $256.4 million.
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Earnings: Scripps Q2 up 3.8 Percent; Op Income Slips
The separation of EW Scripps (NYSE: SSP) and Scripps Interactive occurred on July 1, the day after Q2 ended, so this will be the last time the two Scripps report as one company: Total combined revenue for the quarter was $664.1 million, a 3.8 percent increase from $640.0 in the year-ago quarter. Net income comparisons were affected by a debt repurchase, but op income slipped 1.3 percent to $163.6 million.
The split between the cable/interactive segments and the old media newspaper segments tell you why they split the company in half. Revenue at Scripps Networks (which includes HGTV, Food Network, DIY) was up 13 percent to $349 million, with profit growing 9 percent to $180 million. Revenue at Shopzilla and uSwitch were up 13 percent to $66.9 million, with profits of $15.1 million, compared to $6.8 million, a big jump. The company cited growth at Shopzilla and lower costs at the challenged uSwitch business for the jump. It looks like these results continue a turnaround in this business that was evident last quarter, though top-line growth was a bit down.
And then at the newspaper business, it looks like any other newspaper company: Revenue was down 13 percent to $144 million. Segment profits were almost cut in half to $16.1 million from $30 million. For broadcast TV, revenue slipped to $80.5 million from $84.5 million, and profits fell to $18.3 million from $23.5 million.
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NYTCo. Call: Despite The Dismal Economy, Online Ad Prices Are Holding Up
Opening the call by immediately citing the troubled economy and the challenges faced by the newspaper industry at large, Janet Robinson, NYTCo.'s president and CEO, sought to highlight a few bright spots. Even with the decreased operating income and revenue, Robinson pointed to what she said was the NYT's continued brand strength, reflected in 2 percent growth in circulation revenue in the face of raising newsstand and home delivery prices. The newsstand price will rise again on August 18 from $1.25 to $1.50, Robinson noted.
On NYTimes.com, traffic is continuing to grow, with 17.7 million uniques last month, up roughly 40 percent over last year, Robinson said, citing Nielsen Online data. But on the ad side, the economic slowdown has affected advertising, in particular in the airlines and autos area. Trying to offset what she described as softness in display, digital investments are expected to rise—and therefore lead to increased costs—for the About Group.
Q&A:
-- Asked about the online ad situation, Martin Nisenholtz, SVP, Digital Operations, insisted that pricing has generally held firm. "We've seen decent price increases on major display units. There has been a bifurcation between premium positions and remnant, which largely includes banner. At NYTimes.com, we don't see any cannibalization from the remnant business. At About.com, we've seen softness in display, mainly due to execution issues, which current investment proposals are attempting to address."
-- Of the major ad categories, entertainment cutbacks particularly hurt the June numbers. The category represents a little over 10 percent of the company's ad revenues. Executives said that other categories have followed previous trends. Looking ahead to 2009, Robinson said she sees a tough second half, and signs suggest that the housing market won't make a comeback until the end of next year. She doesn't expect an impact from the Newsday sale.
-- Asked about what sort of results NYTCo (NYSE: NYT). is seeing from digital subscriptions and sales on the Amazon (NSDQ: AMZN) Kindle, Nisenholtz said he feels the trends are good, but a confidentiality agreement with the e-tailer prevents further the company from getting into the details. Nisenholtz: "The Kindle is attracting attention. We're the 11th or 12th most popular item being purchased there. But I would characterize it as more of an R&D effort, rather than a revenue generator."
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Earnings: NYTCo Q2 Continues Slide; Internet Up 12.8 Percent
Citing the effects of the weak economy, NYTCo (NYSE: NYT) announced Q2 revenue of $741.9 million, a 6 percent year-over-year decline from $788.9 million. Net income on a continuing basis fell 5.5 percent to $20.8 million ($.15 per share) from $22 million ($.15 per share). Ad revenue for the quarter fell 10.6 percent to $454.3 million. Both the top and bottom line numbers came in well below analyst estimates, according to MarketWatch. We'll see if the already-depressed stock gets hit harder.
-- The About Group grew revenue 15.8 percent to $28.6 million, though higher operating costs mean that op profit at the unit was only up 7.1 percent to $9.1 million. Total internet revenue grew 12.8 percent to $91.3 million, accounting for 12 percent of total revs.
-- During the quarter, the company had $27.6 million in buyout-related costs, and it's now forecasting total annual buyout costs of $40-$50 million, up from previous guidance of $30-$35 million. Perhaps the call will clarify what this means from an HR standpoint.
-- June revs drop 10 percent, online slows: Total June revs fell 10 percent, while ads fell 16.4 percent, both year-over-year. And while total online revs grew 11.7 percent and online ads were up 18.6 percent last month, in June 2007, NYTCo.'s internet ad revs for the News Media Group rose 22.0 percent over June 2006. June Release
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Earnings: Journal Com Q2 Revs Down 5 Percent; Interactive Up 16 Percent, But Still Tiny
For a newspaper company, this wasn't the worst quarter… Journal Communications (NYSE: JRN), parent of the Milwaukee Journal Sentinel, announced Q2 revenue of $140.1 million, a decrease of 5 percent from $147.5 million in the year-ago quarter. Income from continuing ops fell 29.7 percent to $9 million ($.16 per share) from $12.7 million a year ago ($.19 per share). Online revenue grew 15.9 percent, which is faster than many of its peers, but only to $4.7 million, so a small slice of the pie.
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Earnings: Media General Q2 Income In Free Fall; Interactive up 13.7 Percent, But Unit Swings To Loss
Here's the latest rough newspaper quarter: Media General (NYSE: MEG) announced Q2 revenue of $204.8 million, a decrease of 10 percent from $228.2 million in the year-ago quarter. Operating income was more than cut in half, falling to $10.1 million from $23.8 million. Net income form continuing operations fell to a loss $1.37 million from a profit of $2.39 million. The company is also in the process of measuring an impairment charge, expected to be in the range of $550-580 million. All the usual suspects are to blame here, though this line neatly encapsulates what's going on with Tampa-Bay heavy Media General: "Excluding Florida, where Publishing revenues were down 24.7 percent in the quarter, total Publishing revenues decreased less than 10 percent."
-- Interactive: Credit is due for actually breaking out some interactive numbers, unlike some which keep a real tight lid on things: Revenue was up 13.7 percent to $10.6 million. The company cited its DealTaker unit, as well as the Yahoo (NSDQ: YHOO) partnership, which generated $2 million in revenue for the quarter. The unit, however, lost $656,000, compares to a profit of $357,000. It's not totally clear of the loss is due to some investments made, or if it's actually reflective of declining operations. The company does cite weakness at its Blockdot advergaming unit. Online classifieds revenue also fell 4 percent.
In April, three nominees from activist investors Harbinger were elected to the company's board.
Release | Webcast (11:00 AM ET) | Transcript (via SeekingAlpha)
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