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Hearst Argyle Television Reports Flat 3Q Revenues
11/24/2008

Hearst Argyle Television (NYSE: HTV) reported $176.2 million in revenue for the third quarter, compared to $176.8 million for the same period a year ago. Net income was $11.6 million compared to $9.7 million last year.

The results were affected by a $16.9 million (11.5 percent) decrease in net ad sales, excluding political, to $129.5 million. The weaker categories included automotive, retail, telecom, movies, restaurants, paid programming, furniture and beverages. Gainers included media, home improvement, attractions and financial.

Political was the blockbuster, with a $16.7 million increase to $23.7 million.

Digital revenues fell 6 percent to $4.9 million, while retrans consent revenue increased 22 percent to $6.8 million.

New York-based HTV owns 26 call-letter TV stations and manages three more. The combined stations reach around 21 million households comprising 18 percent of the nation’s TV audience.

Wachovia’s Marci Ryvicker said HTV missed its revenue estimates because the overall decline in ad revenue was 23 percent versus Wachovia’s 15 percent forecast. Wachovia lowered its top-line HTV estimates for this year and next because of concerns about ad-revenue declines, even while a retrans contract with Comcast is expected to ad $8.5 million in 2009.

Wachovia changed its 2008 revenue estimate from $747.2 million to $728.5 million; ’09 was adjusted from $672.7 million to $618.5 million.

“We think that HTV has some of the best operators in the business and management’s conservative style with regards to M&A and the balance sheet,” Ryvicker wrote. “However, we remain cautious on the shares due to a very difficult economic and local ad environment.”

HTV was trading at $15.38 mid-day on Halloween, in line with Wachovia’s valuation of $15 to $17.

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