By: Mark Fitzgerald
Media General Inc., the parent of newspaper and TV broadcast properties that were at the epicenter of the newspaper industry recession, reported a fourth-quarter profit Thursday on deep cost-cutting and adverting revenue declines that at last look to be flattening out.
Total revenue in the fourth quarter fell 14%, which Media General noted was “a sequential improvement” from the 18% year-over-year decrease in the third quarter of 2009. It was also, in percentage terms, the lowest revenue decline so far reported by a newspaper publisher in this earnings season.
Media General President and CEO Marshall N. Morton also said that in December total revenue ?were essentially even with December 2008,” the first time a publisher has reported anything but a decline in at least two years.
?Advertising sales strengthened as the quarter unfolded,? Morton said.
Media General even said that its Florida segment, home to its worst-hit properties including The Tampa Tribune and WFLA, was profitable in the third quarter, with net income of $6.6 million compared to a year-ago loss of $960,000.
Florida?s profit, though, came at a great cost. Media General, which now reports earnings results by geographic segement, said expenses in Florida dropped by 31%, offsetting a 16% decline in total revenue.
As an operator of television stations, Media General faced tough comparables compared with the last quarter of 2008 with its presidential and other election campaign ad revenue.
Overall, Media General reported net income in the quarter of $27.4 million, or $1.18 per diluted share, compared with a net loss of $85.5 million, or $3.86 per diluted share, in the 2008 fourth quarter.
Newspaper and publishing revenue in the fourth quarter fell 14% from the year-ago period, an improvement from the third quarter of 2009?s 18.5% decline.
As with other media companies, Media General?s results reflected deep cost cutting, with expenses down 22% from a year ago.
?We had nearly 900 fewer employees at the end of 2009 compared with 2008 year-end, and we implemented a five-day furlough program in the 2009 fourth quarter,? Morton said. Helping the cost picture was a 57% drop in newsprint expense, which he said reflected both lower prices and lower consumption.?
Media General does not plan on ordering furloughs in 2010, Morton said.
Media General?s Digital Media segment reported an 11% increase in revenue in the quarter.
All its geographic segments reported profits in the quarter, Richmond, Va.-based Media General said. Profits at its Virginia/Tennessee segment surged 67.2% from a year ago to $15.6 million.
Media General said its debt at the end of 2009 $712 million, compared with $730 million at the end of 2008.
Correction: An earlier version of this story reported incorrectly that Q4 revenue of Media General’s Digital Media had decreased. In fact, it increased 11%.