Media General Stock Soars on August Report

By: Shares of Media General Inc. more than doubled in value Thursday, a day after the media company declared August its best month all year despite reporting a year-over-year decline in revenue.

The Richmond, Va.-based company's stock gained $9.64, or 111.3 percent, to close at $18.30. During the past 52 weeks, the stock traded in the range of $7.13 to $31.04. The stock lost 20 percent on Monday.

Media General publishes The Tampa Tribune, the Richmond Times-Dispatch and more than 20 other daily newspapers. It also operates 20 network-affiliated television stations, many of which got a boost in advertising revenue from the Olympics and the political campaigns.

Overall revenue at the company declined just 4.4 percent last month compared with the same period in 2007, a figure the company held up as good in a year in which a worsening economy weighed down an already troubled ad market and sent ripples throughout the news industry.

However, advertising sales in Media General's publishing business fell 19.8 percent in August. The drop wasn't as bad as the 21.6 percent decline in July, but it was worse than the three months before that.

The company, which issued the August report after market close Wednesday, said it didn't believe the rest of the year would be any better.

"Unfortunately, we do not see an improvement in the publishing business during the remainder of 2008, and broadcast transactional advertising also continues to be weaker than previously expected," Chief Executive Marshall N. Morton said in a statement Wednesday.

Edward Atorino, analyst at the Benchmark Co., said Thursday that investors should approach Media General and other newspaper companies cautiously.

"It's pretty discouraging," he said in an interview. "There have been signs of some slowing in the rate of decline, but not much."

He said Media General's broadcast numbers "looked a little better," but the overall revenue left him disappointed.

Ken Doctor, news industry analyst for the research firm Outsell Inc., said Media General owns many newspapers in areas hurt most by the sinking real estate market, including Tampa.