By: E&P Staff Belo reported today net earnings per share for Q4 of $.36 compared with $0.46 in the same quarter of last year. In 2005, the company reported EPS of $1.12 compared with $1.13 in 2004.
Belo's Q4 consolidated revenue decreased less than one percent to $411 million compared with the same period in the previous year. Full year 2005 revenue increased 0.4% to $1.52 billion.
Newspaper group total revenues increased 4.9% in Q4 and 5.6% for the full year. In Q4, advertising revenues grew 4.2% with a 4.4% increase at The Dallas Morning News, a 6.5% increase at The Providence (R.I.) Journal, and a one percent increase at The Press-Enterprise in Riverside, Calif. Advertising revenues at the group's Web sites advanced 38% in Q4 and 54% in 2005. For the year, advertising revenue rose 2.6%.
Retail revenues declined 4% in the quarter and general revenues were down 1.1%. Classified revenues increased 10%. Within the category, real estate was up 19%, employment was up 13%, and automotive declined less than 1%.
"We are encouraged by pacings within the newspaper group and expect solid revenue growth for the first quarter," Robert Decherd, Belo's chairman, president, and CEO, said in a statement. "We currently expect ad revenue for the newspaper group to increase in the mid-to-high single digits, with increases of approximately 5% in January, mid-to-high single digits in February, and high-single digits in March."
Newspaper group operating expenses grew 10% for the quarter including a $6.4 million increase in circulation expenses at the Dallas Morning News, $2.8 million related to advertising and promotion initiatives primarily in Dallas, and 9.2% increase in newsprint expense. Newspaper group EBITDA and earnings from operations declined 14% and 17% respectively.
On the circulation front, Belo said it would be cutting all third-party barter circulation, effective April 1, 2006. Other third-party initiatives and bonus days may be undertaken subject to Belo's guideline limiting this type of circulation to 3.5% of the newspaper's overall circ.
The company is eliminating its circulation in outlying areas in Dallas. Belo will cease distributing to areas roughly 200 miles or more outside of the Dallas/Fort Worth designated market area, with the exception of Austin, the state capital.
Belo said that for the six-month period ending March 2006, circulation at the Dallas Morning News should be approximately equal to the March 2005 period.
Because of these moves, the Dallas Morning News expects daily and Sunday circulation to drop about 7.5% and 6.5%, respectively, for the September 2006 reporting period. Approximately 15,000 daily and 17,000 Sunday papers delivered to outlying areas and 18,000 daily and 24,000 Sunday papers distributed through third-party arrangements will be eliminated. The March 2007 reporting period will also be affected.
The Providence Journal will show a decrease in third-party barter circulation of 2% on Sunday for the March 2006 period. Total daily circ for the period is expected to decline 3% and Sunday is expected to drop 6%. The September 2006 period will fully reflect the impact of the changes; daily and Sunday is expected to drop 1% and 5%, respectively.
Circulation at the Press-Enterprise will not be affected by the announcement changes in third-party arrangements. For the March 2006 period, daily and Sunday circ is forecasted to decrease 1% and 2%, respectively.
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