Earnings Preview: Media General

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Media General Inc., a newspaper and television broadcast company, reports fourth-quarter earnings on Wednesday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: In October, Media General completed the $37 million sale of CBS television stations WIAT in Birmingham, Ala., and KIMT in Mason City, Iowa, to New Vision Television LLC. The company also closed on the sale of CBS television station WDEF in Chattanooga, Tenn., to Morris Multimedia Inc. for about $23 million.

Last month the company, which publishes newspapers including the Richmond Times-Dispatch and Tampa Tribune, said it plans to post the online career sections of 25 of its daily newspapers to Yahoo Inc.’s HotJobs platform.

EXPECTATIONS: Analysts expect a fourth-quarter profit of $1.29 per share on $297.3 million in revenue, according to a poll by Thomson Financial.

Media General sees its fourth-quarter earnings from continuing operations in a range of $1.30 to $1.33 per share.

At a conference in December, the company said that revenue at its publishing unit is expected to grow between 3 percent to 4 percent in the fourth quarter, which includes an extra week compared with the previous year’s fourth quarter. Excluding the extra week, publishing revenue is seen falling from the year-ago period.

Media General expects its broadcast unit to record a 71 percent to 73 percent rise in fourth-quarter revenue from the addition of four NBC stations and heavy political spending. Revenue from stations sold is excluded for both 2006 and 2005.

ANALYST TAKE: Edward Atorino, an analyst with Benchmark Co., estimates Media General’s fourth-quarter earnings from continuing operations at $1.31 per share.

“We like Media General’s long term prospects because of its leading newspaper and broadcasting properties in the growing Southeast and the recent expansion of broadcasting operations through the purchase of four NBC stations. But weakness in publishing and lower equity earnings from SP Newsprint will trim 2006 earnings per share and keep earnings under pressure in 2007,” he wrote in a Dec. 15 client note.

STOCK PERFORMANCE: Media General’s shares rose 2 percent during the quarter, closing at $37.17 on Dec. 29 on the New York Stock Exchange. The stock fell 28 percent for the year.

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