Dallas paper helps ProJo parent cut loss

By Ted Nesi
PBN Web Editor

DALLAS – The Providence Journal’s parent company, A. H. Belo Corp., on Friday said its third-quarter losses narrowed thanks to improved performance by its flagship newspaper, The Dallas Morning News.

A. H. Belo posted a net loss of $5.8 million, or 28 cents a share, in the three months ended Sept. 30, compared with a net loss of $17.3 million, or 83 cents a share, in the same period a year earlier. Revenue fell 17.5 percent to $126.87 million.

The $5.8 million loss included both a $20 million non-cash charge related to the closing of a plant in Texas and a $12 million gain from a federal income tax refund.

While advertising sales continued to plummet, A. H. Belo increased the amount of money it gets from subscribers to The Morning News and The Journal.

The company’s ad revenue dropped 27 percent to $83.82 million from July through September, with classified revenue shrinking 40 percent. Circulation revenue, on the other hand, rose 11.6 percent to $35.23 million.

The Journal posted the best margin of earnings before interest, taxes, depreciation and amortization in the quarter, followed by The Morning News and The Press-Enterprise of Riverside, Calif., A. H. Belo said.

However, The Journal and The Press-Enterprise lost a larger share of their advertising revenue compared with last year than The Morning News did, Robert W. Decherd, A. H. Belo’s chairman, president and CEO, said in a statement.

“The year-to-year percent decline in advertising revenue eased slightly in the third quarter when compared to the first and second quarters of 2009 due to the improved performance of The Dallas Morning News,” he said.

Internet revenue fell 15 percent compared with last year, but excluding classified sales, it rose 15.6 percent.

A. H. Belo cut its third-quarter operating expenses 20 percent, or $35.4 million, to $143.8 million compared with a year earlier. The company spent 50 percent less on newsprint as it printed fewer papers and benefited from a decline in prices.

As has been the case for other newspaper companies, A. H. Belo’s stock has rebounded in recent months after falling to a 52-week low of 59 cents a share on March 9. It closed at $3.41 on Thursday in New York Stock Exchange trading.

The company has continued to cut costs, laying off between 40 and 45 workers at The Press-Enterprise earlier this month.

In an interview with Providence Business News last week, Alison K. Engel, the company’s senior vice president and chief financial officer, said the current financial turmoil in the newspaper business means companies like A. H. Belo are “kind of in a continuous state of restructuring.”

The company also has taken steps to do more than just reduce expenses recently. The Dallas Morning News recently trumpeted an increase in the amount of news it publishes, partly to argue that readers are getting more bang for their buck following subscription hikes.

“We are pleased with the recent improvements in the quantity and quality of The Morning News’ journalistic products and the related opportunity to increase circulation pricing,” Decherd said.