DALLAS – Belo Corp. (NYSE: BLC), formerly the parent of The Providence Journal Co., reported a 2007 net loss of $262.81 million or $2.57 per diluted share, compared with 2006 earnings of $130.53 million or $1.26 per share.
Net operating revenue declined 4.6 percent to $1.52 billion from the year-ago $1.59 billion.
Full-year and fourth-quarter results included a fourth-quarter non-cash charge of $367 million or $3.58 per share – disclosed Jan. 24 – that included reductions to goodwill of $243 million at The Providence Journal, $102 million at The Press-Enterprise in Riverside, Calif., and $22 million at WHAS-TV in Louisville. Excluding those impairments, Belo posted a full-year profit of $103.7 million or $1.01 per share.
The full-year results also included $9.3 million in one-time expenses – most in the fourth quarter – from the spinoff of the media company’s newspapers and related businesses into a separate public company, the A.H. Belo Corp. (NYSE: AHC), in a transaction completed last week. The television, cable and related businesses continue to operate under the Belo Corp. name. (READ MORE)
In the Television Group, total revenue fell 0.8 percent to $776.96 million, and spot revenue fell 1.1 percent, as political advertising declined to $14.6 million last year from $47 million in 2006. But online ad revenue for TV Group sites surged 41 percent.
Newspaper Group revenue fell 10 percent to $738.67 million, led by an 11-percent decline in advertising revenue. But the group’s Web-site advertising sales increased 20 percent.
“The Television Group achieved outstanding performance in 2007, reporting record revenue even though 2007 followed the strong political spending of 2006, and the Newspaper Group made significant progress in transforming its business to compete in an increasingly Internet-centric environment,” Dunia A. Shive, Belo Corp.’s president and CEO, said in an after-market statement.
Depreciation and amortization expenses increased 5.7 percent for the year and 7.5 percent for the fourth quarter, mostly because of new facilities at The Dallas Morning News and The Press-Enterprise, the company said.
During 2007, Belo repurchased about 827,000 shares at a total cost of $17.1 million.
For the fourth quarter, Belo posted a loss of $333.44 million or $3.26 per diluted share, compared with the year-ago period’s earnings of $51.35 million or 50 cents per share. Fourth-quarter net operating revenue shrank 6.8 percent year-over-year to $406.72 million.
Fourth-quarter revenue in the Television Group fell 2.4 percent compared with the year-ago period to $217.98 million, and spot revenue fell 6 percent, as political revenue shrank to $8.4 million from the year-ago $31.6 million. But online ad revenue surged 43 percent.
In the Newspaper Group, total revenue fell 11 percent to $188.74 million, led by a 14-percent decline in advertising revenue, though online ad revenue increased 15 percent compared with the 2006 fourth quarter. Adjusted for the difference in Sundays – the 2007 fourth quarter had one fewer than the 2006 period – ad revenue fell 12 percent overall, 19 percent at The Press-Enterprise, 12 percent at the company’s flagship Dallas Morning News and 6 percent at The Providence Journal.
Going forward, Shive said, “Both Belo and A.H. Belo are well positioned to compete effectively in their respective industries. Each company has outstanding assets with balance sheets appropriate for their businesses and the capacity to support future growth and innovation.”
For the full year, “we expect total revenues [at Belo Corp.] to be up in the mid-to-high single digits, depending on the strength of political in our markets and the stability of the economy,” Shive said. “We expect Internet revenue growth to be less than the rate experienced in 2007 but still up strong double-digits. We expect operating expense to be up in the mid-single digits. Corporate expense will be approximately $40 million, excluding spinoff-related costs and corporate costs attributable to A.H. Belo from Jan. 1 to the spinoff date of Feb. 8. … While Belo’s leverage ratio at the time of the spinoff is projected to be about 4.4 times, we expect the leverage ratio to be below 4 times at year-end 2008.” The company posted a leverage ratio of 3.1 times as of Dec. 31.
At the new A.H. Belo, “We’re only in a position to provide some general perspective on 2008 at this time, which depends on economic conditions during the year and related advertiser responses to consumer spending patterns,” Robert W. Decherd, the newspaper company’s chairman, president and CEO, said in a statement last night. “A.H. Belo’s newspaper advertising revenues will be down in 2008, but not at the levels of decline experienced in 2007.” But, he added, “Declines in Providence and Riverside especially will be more substantial than in Dallas/Fort Worth.”
Belo Corp. (NYSE: BLC) – formerly a diversified media company whose properties included television, cable, newspaper and interactive media assets – is now one of the nation’s largest pure-play publicly owned television companies, with annual revenue of about $775 million. Belo owns and operates 20 television stations in 15 markets, plus regional cable news channels in Texas and the Northwest. To learn more, visit www.belo.com.
The new A.H. Belo Corp. (NYSE: AHC) owns and operates four daily newspapers, including The Dallas Morning News and The Providence Journal, and several specialty publications targeting the young-adult and Hispanic markets, plus their associated Web sites. It also owns direct mail and printing businesses. To learn more, visit www.ahbelo.com.
