DALLAS – A.H. Belo Corp. (NYSE: AHC) saw itsthird-quarter loss widen to $17.26 million, a 275-percent increase from the $6.28 million loss posted a year ago by its predecessor, the newspaper segment of Belo Corp., on revenue that fell 15.45 percent to $153.83 million.

A.H. Belo – spun off by Dallas-based Belo Corp. (NYSE: BLC) in early February – owns and operates three major daily newspapers, the Journal, its flagship Dallas Morning News and The Press-Enterprise of Riverside, Calif.; a variety of specialty publications for the youth and Hispanic markets; the Web sites associated with its publications; and direct-mail and commercial printing businesses.

Its loss per diluted share widened to 84 cents in the quarter ended Sept. 30, from 31 cents in the 2007 third quarter (READ MORE) and 16 cents per share in the second quarter of 2008, after it became a standalone company. (READ MORE)

Results for the period ended Sept. 30 include one-time charges of about $16.6 million: $11.1 million related to the company’s recent “voluntary severance” offer, which the company financed by withdrawing $10 million from its existing line of credit; and $4.5 million “related to the impairment of a printing press,” A.H. Belo said.

The employee buyout offer completed in September “will result in annualized savings of approximately $24 million,” the company said. It was followed by the layoff of about 90 workers companywide, to save another $5 million per year. (READ MORE) That “reduction in force,” completed Oct. 24, resulted in one-time costs of $2.4 million that will be recorded in the fourth quarter.

At The Providence Journal, 22 workers accepted the buyout and another 31 were laid off. The news department was hardest hit, losing 43 workers overall: 12 in the buyout and 31 in the later cuts, according to The Providence Newspaper Guild.

“These are challenging times for A.H. Belo, the industry and the country,” wrote Robert W. Decherd, the company’s chairman, president and CEO. “In light of a weak ad environment and ad trends that may not stabilize in the short term, we remain steadfast in delivering highly-valued audiences and marketing solutions to advertisers while maximizing our existing infrastructure and reducing expenses company-wide.”

Net operating revenue fell 15.45 percent compared with the 2007 third quarter to $153.83 million, as a decline in advertising sales outweighed gains in circulation and other revenue. Internet revenue fell 19 percent compared with a year ago to $11.4 million, or 7.4 percent of total company revenue, A.H. Belo said. Ad revenue (including both print and Internet) fell 22.17 percent to $114.81 million, “driven primarily by declines in classified revenue at The Dallas Morning News and The Press-Enterprise.” Circulation revenue companywide increased 11.89 percent year over year to $31.56 million; and other revenue, including commercial printing, rose 19.94 percent to $7.46 million, A.H. Belo said.

Third-quarter operating costs rose 1.32 percent year over year to $179.22 million, as the printing-press impairment and a $4.86 million increase in wage and benefit costs more than offset declines in costs for production, distribution and supplies including newsprint and ink. Excluding one-time costs, however, “AHC reduced total consolidated operating expenses by $2.0 million, or 1.2 percent, over the same period last year,” the company said. “This decrease included a $4.8 million decline in outside services expense, a $1.8 million decline in advertising and promotion expense and a $0.8 million decline in newsprint expense.

The company’s newspapers showed an overall loss of $3.07 million for the quarter, compared with a year-ago gain of $30.67 million, although A.H. Belo said that “excluding voluntary severance costs, total operating expense at all three major newspapers declined in the third quarter.” Their margin excluding one-time expenses was 8.1 percent. “Margins were highest at The Providence Journal, followed by The Dallas Morning News,” A.H. Belo added.

Last week, the company announced additional austerity measures – including a salary freeze for non-union workers – and said it had renegotiated its credit line, to gain more flexibility in coping with what Decherd called “the current combination of cyclical and secular pressures.” (READ MORE)

The revisions shrank the credit line to $50 million from the previous $100 million; gave “a security interest in the company’s accounts receivable and inventory” to the bank group providing the line of credit; raised the interest rate at 250 basis points above the London Interbank Offer Rate (LIBOR); waived the fixed-charge-ratio covenant through Jan. 31; and restricted the payment of future dividends. But that restriction does not apply to the 37.5-cent-per-share third-quarter dividend that was declared by the A.H. Belo board of directors on Sept. 24 and is payable Nov. 10, the company said.

In addition, Decherd wrote in an Oct. 24 letter to shareholders, “We’ve selected CB Richard Ellis – a prominent national real estate firm – to recommend options for monetizing AHC real estate in Dallas and Providence that is unrelated to daily operations or can be included in a strategic plan to modify where daily operations take place. This will be a longer process than other initiatives we’ve undertaken, but should result in some property sales in 2009,” he said.

A.H. Belo Corp. (NYSE: AHC) – formerly the newspaper group of Belo Corp. (NYSE: BLC) – owns and operates The Providence Journal, The Dallas Morning News and The Press-Enterprise of Riverside, Calif., as well as a variety of specialty publications for the youth and Hispanic markets; the Web sites associated with its publications; and direct-mail and commercial printing businesses. For more information, visit www.AHBelo.com.