By: Stephanie Stoughton, AP Business Writer
(AP) Media General Inc. said Tuesday its second-quarter earnings rose 6% as political and classified ad sales increased, but the company still fell short of Wall Street’s expectations.
The Richmond-based communications company reported net income of $18.5 million, or 78 cents a share, in the quarter ended June 27. That’s up from $17.5 million, or 75 cents a share, in the comparable period one year earlier.
“Media General’s second-quarter results reflected an outstanding profit performance by the Broadcast Division … driven by robust political advertising and increased local time sales,” said J. Stewart Bryan III, the company’s chairman and chief executive.
Bryan said the company’s publishing division, which includes the Richmond Times-Dispatch, continued to benefit from growth in classified advertising, particularly help-wanted ads.
Income from continuing operations rose nearly 8% to $18.5 million, or 79 cents a share, in the quarter from $17.2 million, or 75 cents a share, in the year-ago period. Last year, the company sold Media General Financial Services.
Analysts surveyed by Thomson First Call had anticipated income from continuing operations of 84 cents a share. The company previously had forecast earnings below 85 cents a share.
Total revenue for the quarter rose nearly 7% to $224.9 million from $210.7 million.
Continued softness in department store advertising hurt revenue, with the company’s three metropolitan newspapers –the Times-Dispatch, The Tampa (Fla.) Tribune and the Winston-Salem (N.C.) Journal — reporting year-over-year declines.
Corporate expenses, as expected, were higher in the quarter in part due to costs associated with employee benefits and information technology improvements. The company also absorbed higher legal costs associated with compliance with the Sarbanes-Oxley Act, which requires accounting reform for public companies.
Equity earnings from Media General’s one-third ownership of SP Newsprint, while improved, “were well below our expectations,” Bryan said. So far this year, increases in newsprint prices have not appeared as quickly as anticipated, he said.
Media General said it expects third-quarter net income to be in the middle of the current range of analyst estimates: 55 cents per share to 74 cents per share.
Media General owns newspapers, television stations and online information services, mainly in the Southeast.