ProJo parent Belo’s losses double in 2Q

By Ted Nesi
PBN Web Editor

DALLAS — The Providence Journal’s parent company, A. H. Belo Corp., said today its second-quarter losses more than doubled compared with a year earlier as advertising revenue at The Journal and its other properties dropped 30 percent.

A. H. Belo (NYSE: AHC) posted a net loss of $7.1 million, or 34 cents per share, in the three months that ended June 30, compared with a net loss of $3.2 million, or 16 cents per share, in the same period last year.

Excluding the cost of a new customer-service system at The Dallas Morning News and a gain from insurance claim proceeds, A. H. Belo lost $6.5 million, or 32 cents per share.

The Dallas-based company said its total quarterly revenue fell 21.9 percent to $127.5 million from a year earlier, when the company’s revenue totaled $163.3 million.

A. H. Belo stock was up a penny at $1.78 a share in New York Stock Exchange trading at 12:09 p.m. Although the stock price has declined about 75 percent in the past year, it has roughly tripled from the low of 67 cents it hit in March.

The earnings report comes less than a week after The Journal unveiled a redesign of its print edition. The paper also announced earlier this month that it will sell Rhode Island Monthly magazine to its publisher and president.

Advertising revenue at A. H. Belo’s four major papers – The Morning News, The Journal, The Press-Enterprise of Riverside, Calif., and the Denton Record-Chronicle – and its smaller holdings continued to plummet, falling 30.2 percent to $87.5 million compared with the second quarter of 2008. The company said it saw declines in retail, general and classified revenues across all its markets.

Internet revenue fell 20.8 percent to $9.8 million compared with the same period last year and accounted for 7.6 percent of total quarterly revenue, up slightly from 7.4 percent a year ago.

Circulation revenue was up 9.9 percent to $33.3 million from a year ago thanks to higher newsstand and home delivery prices for The Journal and The Morning News.

The company cut quarterly expenses 21.1 percent compared with a year earlier to $132 million, the result of multiple rounds of layoffs, compensation reductions and other cost-cutting measures.

A. H. Belo said it had $6.7 million in second-quarter earnings before interest, taxes, depreciation and amortization (EBITDA), and said The Journal posted the company’s highest EBITDA margin in the quarter, followed by The Morning News.

A. H. Belo also continued to pay down its debt. The company said it owed $3.5 million as of June 30, down from $12.7 million at the end of the first quarter, adding that it was in compliance with its bank covenants at the end of the second quarter.

“We successfully managed costs in the second quarter to remain EBITDA positive and significantly pay down the company's credit facility,” Robert W. Decherd, A. H. Belo’s chairman, president and CEO, said in a statement. “A. H. Belo continues to experience success with our strategy of providing high quality newspaper subscribers to our advertisers, resulting in increased circulation revenue in 2009.”

The Journal has had four rounds of staff reductions since last September, reducing its work force by about 150 and leaving the paper with 562 full- and part-time workers as of March.

Since 2006 the Journal’s annual revenue has fallen 19 percent, reaching $131.47 million in 2008. The trend continued this year, as first-quarter revenue at the paper fell 30.5 percent compared with a year earlier. A. H. Belo posted a net loss of $62.30 million last year.