Sun-Times Media Group Swings to Loss in 4Q as Annual Losses Widen

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By: E&P Staff

The Sun-Times Media Group Inc. (STMG) reported falling revenue and widening losses for the fourth quarter and for 2006 as a whole.

In filings with the U.S. Securities and Exchange Commission (SEC), STMG reported a net loss of $34.6 million, or $0.43 per share, compared to a profit of $31.6 million, or $0.35 per share, in the fourth quarter of 2005.

STMG said its loss from continuing operations was $36.3 million, or $0.45 per share, compared to a profit of $6.2 million, or $0.07 in the year-ago period.

For the year ended December 31, Chicago-based STMG reported a net loss of $56.7 million, or a loss of $0.66 per share, compared with a loss of $11.6 million, or a loss of $0.13 per share, for the year ended December 31, 2005.

For the year, the loss from continuing operations was $77.6 million, or $0.91 per share, versus a loss of $45.5 million, or $0.50 per share, in 2005, STMG said.

Total operating revenues for the fourth quarter were $109.8 million compared with $117.2 million in the year-ago period.

For the year, operating revenues were $418.7 million versus $457.9 million for 2005. STMG noted that all of its revenue is generated by the Chicago Sun-Times and about 100 other dailies and community papers in its Sun-Times News Group (STNG) newspaper operations.

Fourth-quarter ad revenues fell 7% from the year-ago period to $85.7 million. For the year ad revenue was down 9% to $324.6 million.

Circulation revenues were flat in the fourth quarter at $21.8 million, but decreased for the full year to $83.6 million from $88.2 million.

While newsprint and ink expenses declined, other operating expenses increased, chiefly on $5.2 million in expenses related to severance costs.

“The 2006 results, which are reflective of the challenging market and competitive environment of the business, are clearly disappointing, CEO Cyrus F. Freidheim Jr. said in a statement. “However, we now have a new management team in place with the mandate to create a revitalized business out of what is a great journalistic product and the number one source of news in the greater Chicago area.”

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