By: Mark Fitzgerald
A day after swinging the axe on 400 employees, E.W. Scripps reported Friday it swung to a third-quarter loss of $16.8 million, or 31 cents a share, compared to a profit of $88.4 million, or $1.63 a share.
According to analysts surveyed by FactSet Research, Wall Street had expected a profit on average of 10 cents a share.
Scripps also joined the parade of companies suspending its dividend — although in its case it was not forced to do so under any new credit agreement.
Looking ahead to a 2009 with no political advertising, “broad economic uncertainty,” and a final year of higher-than-normal capital expenditures to complete a newspaper production facility in the Naples, Fla., area, Scripps said its board determined the dividend had to go.
In July, E.W. Scripps newspaper, local television, and syndication businesses were spun off from the newly created Scripps Networks Interactive of lifestyle cable TV programming and interactive properties. So its Q3 results reflect continuing ad weaknesses both at newspapers and television.
Overall revenue decreased 9% to $230 million in the quarter, with year-over-year revenue from newspapers operated solely by Scripps down 17% to $131 million.
Newspaper advertising revenue fell 20% to $101 million, on across-the-board losses — including online.
Classified ad revenue plunged 28% to $33.6 million.
Local fell 16% to $27.3 million, and national plummeted 31% to $5.9 million.
Preprint and other ad revenue declined 12% to $24.8 million.
Online ad revenue fell 12 percent to $9.1 million. But Scripps noted hat online-only ad revenue increased 13.4%.
“Behind all the accounting noise related to the separation is a healthy company built upon a collection of solid media businesses in attractive local markets,” Scripps CEO Rich Boehne said in a statement. “To put Scripps in the best possible position to exploit opportunities and build value for shareholders during this period of economic uncertainty, we’ve made a series of decisions — including headcount reductions, suspension of the dividend and other expense reductions — that will keep our debt low and balance sheet healthy. These are unusual times, not without difficulty and peril. But we believe dedication to strong financial health in the short term will yield outsized returns over the long term for those in position to exploit the transformation of our industry.”