DALLAS: Belo said it met analyst estimates with earnings of 10 cents a share for the second quarter, compared to 25 cents last year. Revenues for its 20 TV stations and related Web sites fell 23 percent to $144.8 million, compared to nearly $189 million a year ago. Net earnings were $10.3 million compared to $26.4 million a year ago.
“The company’s second-quarter total revenue decline of 23 percent was very similar to the decline experienced in the first quarter as the soft advertising environment continued, especially in the company’s larger markets, said Dunia A. Shive, Belo president and CEO. “However, we did see an uptick in sales activity in June that has also carried into July.”
Cost-cutting reduced Belo’s (NYSE: BLC) operating expenses by around 13 percent for the quarter, she said.
Total spot revenue, including political, was down 28 percent; local was down 27 percent, national, down 29 percent. Revenue from the automobile segment fell 53 percent, in line with the broadcast industry as a whole.
Advertising revenue from Belo Web sites decreased 5.1 percent to $7.1 million, representing almost 5 percent of total revenues. Retransmission revenue totaled $11.4 million in 2Q09 and represents almost 8 percent of total revenues. Full-year retrans is expected to reach about $41 million.
Total debt as of June 30, 2009 was $1.069 billion, a reduction of $23 million from Dec. 31, 2008. Leverage and interest coverage ratios, as defined in the company’s credit facility, were 5.3x and 3.0x, respectively, as of June 30. Belo invested $1.7 million in capital expenditures in the second quarter, down from $9.8 million in the second quarter of 2008.
“Looking at third quarter,” Shive said, “visibility is limited due to later booking of spot advertising and uncertainty surrounding the timing of automotive spending from GM and Chrysler. However, the combined local and national spot percentage decline in June was better than May, and July will be better than June.
“Current pacings indicate that the third quarter combined local and national spot percentage decline will improve from second quarter. Excluding spin-off related charges in 2008, full-year 2009 combined station and corporate operating costs are expected to be 12 percent lower than 2008, an improvement from previous guidance.”
Common stock traded most of last Friday around $2.90, up nearly 20 cents on its 2Q results. Shares of Belo were boosted above $3 today on a wider market rally related to a surprise profit at a European bank and rally in oil and metals.
-- Deborah D. McAdams
Previous TVB coverage of Belo:
April 30, 2009: “Belo Reports Net Income on Bond Retirement“
Belo’s 20 TV stations reported first-quarter net income of $8.9 million on revenues of $133.5 million, compared to a $15.3 million loss on revenues of $178.8 million in 1Q08. The quarter included a $9.1 million gain net of taxes on retirement of company bonds, while 1Q08 included a one-time $21.4 million charge related to spinning out the newspaper division.
March 20, 2009: “Belo Declares 2Q Dividend, Suspends the Rest“
Belo Corp. has declared a cash dividend of 75 cents a share payable June 5 to stockholders of record as of May 15. Subsequent dividends will be suspended “indefinitely,” the company said.
“In light of current economic conditions, suspending the dividend will allow Belo’s management team to continue to focus on paying down debt and preserving cash while enhancing the company’s financial flexibility…”