Belo Corp. earned 14 cents per share in the third quarter, a penny below Q3 2007, thanks to the weakening economy—especially in the Phoenix market—and Hurricanes Ike and Gustav. Its revenue declined 6.4 percent from last year’s Q3.
Belo President and CEO Dunia A. Shive said in a statement that the hurricanes cost the company approximately $3.5 million, including an estimated $2.6 million in lost ad revenue due to continuous news coverage and lower audience levels caused by power outages.
Excluding the effects of the hurricanes and some other costs, the company's earnings from operations decreased just 3.4 percent.
"Belo's operating margins and cash flows remain strong,” Shive continued. “While the difficult advertising environment is expected to continue, I'm confident we are taking the necessary steps to be an even stronger company when the eventual recovery takes hold."
Declines in core local and national spot business offset incremental gains from political and Olympics revenue, Belo said. Total spot revenue, including political, was down 8.8 percent with 13 percent and 18 percent decreases in local and national spot, respectively.
The automotive category was down 26 percent.
Excluding the displaced revenue due to the hurricanes, total revenue would have decreased 4.9 percent, with half of that decline attributed to stations in Phoenix, where the company cited “significant economic issues related to the housing crisis.”
Advertising revenue associated with Belo's Web sites increased 18 percent to $7.9 million in the third quarter 2008, representing 4.6 percent of Belo's total revenues. Retransmission revenues totaled $8.4 million in the third quarter of 2008, a 41 percent increase compared to the third quarter of 2007. Belo expects to have generated more than $31 million in retransmission revenue in 2008.
Total station expenses decreased 2.4 percent in the third quarter of 2008 versus the same period last year in part due to a hiring freeze and staff reductions. Belo had 5 percent fewer employees Sept. 30 than at the start of the year.
The revenue slide is expected to continue, with Belo expecting an 8 percent decline in revenue in the fourth quarter compared to last year’s Q4, despite $36 million in political revenue.
Belo’s stock price topped $22 per share back in June 2007 and at $7 per share Sept. 12, before the world financial crisis kicked into high year. Monday morning, it traded at about $2.13.