Sun-Times Media Group 3Q Loss as Big as It Had Warned

By: E&P Staff Back in October, the Sun-Times Media Group warned that its third-quarter financial results would be bad. After markets closed Wednesday evening, the publishing company of the Chicago Sun-Times reported results that were all they were advertised to be.

The company reported a third-quarter loss of $34 million, or $0.43 per share, compared with a year-ago loss of $9.1 million, or $0.10 a share.

The loss from continuing operations for the first nine months of the year was $41.3 million, or a loss of $0.48 per share, compared with a loss of $51.7 million, or a loss of $0.57 per share, the company said.

Total operating revenues for the third quarter were $99.1 million, down from $113.6 million in the year-ago period.

Losses were driven by depressed ad revenues, the company reported.

The Sun-Times News Group (STNG) operating segment, which produces all the company's operating revenues, was hurt by an "advertising performance (that) lagged the Chicago market in the third quarter largely due to weakness at the Chicago Sun-Times, as well as at publications in the southwest suburbs, including the Daily Southtown.

The company said its suburban Chicago papers "modestly improved their market share of print advertising revenue in the third quarter versus the year-ago period."

Advertising revenues in the third quarter were $76.4 million, down $12.5 million, or 14%, compared with the prior year period, the company said.

Circulation revenues in the third quarter were down 8% compared with the same period a year ago, reflecting lower single-copy sales and continued competitive discounting of home subscription rates, the group said.

Newsprint expense in the third quarter declined 12% to $15.1 million. Total newsprint consumption was down 22% due to lower circulation and page volumes, as well as planned reductions of page sizes of many of STNG's titles, the company said.

CEO Gordon A. Paris said the company had taken "significant steps" to improve its cost structure, including closing two printing plants.

"We are exploring ways to better leverage these brands to improve our profitability," Paris said in a statement. "In particular, with respect to the Chicago Sun-Times, we are analyzing alternatives to reposition and reenergize that property to more effectively meet the needs of our targeted print and online readers and advertisers."

The company, formerly known as Hollinger International and led for many years by Conrad Black, has come under recent pressure from shareholders who would like to see the chain sold.

Paris said the company is "actively assessing a broad array of options across the company and its assets."