Belo Earnings Down Slightly On Fall In Newspaper Revenues

By: E&P Staff Dallas-based Belo Corp. Thursday reported third-quarter earnings of 18-cents per share, down from 19-cents per share in the year-ago quarter. Belo said weak newspaper group results, including a 7.8% tumble in revenue, offset a 1.8% revenue gain by its television stations.

"Belo's Newspaper Group results were affected by a soft advertising environment particularly at The Press-Enterprise in Riverside where Southern California housing and credit issues have impacted local economies, Belo Chairman and CEO
Robert W. Decherd said in a statement. "Despite lower revenues in Belo's Newspaper Group, both The Dallas Morning News and The Providence Journal delivered year-over-year EBITDA (earnings before interest, taxes, deduction, and amortization) increases in the third quarter."

Decherd said cash flow at the Morning News increased 26% from the year-ago quarter, an improvement over the 21% year-over-year increase recorded in second quarter 2007.

Belo announced recently that it is splitting its newspaper business from the its television group. The pure-play newspaper group will be called A.H. Belo Corporation., and have the New York Stock Exchange symbol of AHC. Decherd said Thursday that the spin-off is expected to take place in the first quarter of next year.

CFO and Executive Vice President Dennis A. Williamson said Belo expects its fourth-quarter newspaper results "to be down consistent with what we've experienced during the first nine months of 2007." He noted that Q4 of 2007 has one less Sunday than last year's final quarter.

Belo consolidated revenue totaled $364 million in the third quarter of 2007, down 3.2% from the third quarter of 2006. Consolidated EBITDA fell 1.7%.

Total operating costs and expenses declined 2.2%, mostly from the layoffs implemented in 2006, lower pension expense related to the company's decision to freeze its pension plan as of March 31, 2007, and lower newsprint expense. Belo also experienced lower costs as a result of its decision last year to reduce the circulation area of the Morning News.

Belo said its Television Group revenue increased 1.8% in the quarter, despite tough comparables, including political advertising revenue. In Q3 of 2007 political revenue was $3.2 million compared to $7.5 million in the year-ago period.