By: E&P Staff
Milwaukee-based Journal Communications Inc. said Tuesday that second-quarter 2006 earnings slid 16% from the same period of 2005 on essentially flat revenues of $197.2 million.
But the company said revenue was impacted negatively by a $5.1 million reduction of revenue for credits to be issued toward 2007 advertising in its flagship Milwaukee Journal Sentinel. Journal Communications is giving those credits under a settlement, awaiting court approval, with a classified advertisers who sued when the Journal Sentinel acknowledged that its 2003 and 2004 net paid circulation numbers were inaccurate. Journal Communications said the revenue reduction includes a voluntary offer made to preprint advertisers.
Journal Communications also noted it took a reserve of $700,000 related to the litigation costs. Revenues also included a one-time curtailment credit of $1.7 million related to a pension plan amendment, and $1.1 million in insurance proceeds from a business interruption claim on the commercial printing plant closed after it was damaged during Hurricane Katrina.
Publishing revenue fell 10% year-over-year to $79.4 million from $88.2 million.
“During the quarter, the Broadcast Group again delivered a solid performance while weakness persisted in publishing,” Chairman and CEO Steven J. Smith said in a statement. He said television was “particularly strong” with improved results in all but one of its markets. Radio revenue also rebounded in the last two months of the quarter, and margins improved.
“At the daily newspaper, we continue to be challenged by a decline in classified advertising, particularly in the automotive category,” Smith said.
He noted, though, that interactive revenue was up nearly 29% to $2.3 million in the quarter. The Journal Sentinel launched eight new sites during the quarter and purchased Milwaukeemoms.com, a site that targets Southeastern Wisconsin parents.
The Journal Sentinel kept the increase in total operating costs to less than 1%, and payroll costs at the daily were down nearly 3%.