LIN Revenue Rises, but Probably not Next Quarter

LIN touted its transformation into a "new media" company.
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LIN TV Corp. enjoyed a 5 percent growth in net revenue in the third quarter of 2008 to $98.8 million, compared to $93.7 million Q3 2007. Operating income grew 39 percent over the year-ago quarter.

Net income for quarter was $10 million (20 cents per share), up from $1.7 million (3 cents per share) in Q3 2007.

LIN attributed the increase primarily to increases in political and digital revenues (and lower costs) as it touted its transformation into a “new media” company.

The company has launched new Web partnerships, including one with Fox Interactive Media to develop (and distinguish) its Web sites, and one with Backchannelmedia for interactive ad technology on station Web sites in New Haven, Conn.

President and CEO Vincent Sadusky said the company wants its Web sites to be the top local source for both news and “user engagement.”

On Election Day, the company will break out new software that will allow results to be shown simultaneously online and on TV, streamlining what used to take several steps.

Political advertising was $11.4 million, compared to $1.3 million in Q3 2007.

Digital revenues—including both Internet advertising revenues and retransmission consent fees—nearly doubled to $8.1 million from $4.3 million in the same period last year. Within that category, retrans fees grew 91 percent from Q3 2007, and Internet revenues grew 81 percent with 134.5 million page views, up 35 percent from Q3 2008.

With a third-quarter agreement with Charter Cable, and an agreement this week with Time Warner Cable, LIN now has retrans agreements with all major carriers in its markets, the company said.

LIN currently expects that fourth quarter 2008 net revenues will decrease in the range of 6. percent to 9 percent ($6.5 million to $9.8 million), compared to net revenues of $108.6 million for the Q4 2007. It would be the company’s first-ever loss in the fourth quarter of an election year. Gross political advertising is expected to approximate $25 million in the quarter, but core advertising pacings are currently down in the high 20 percent range.

The ongoing financial crisis is leading LIN to re-evaluate its cost structure as part of an overall strategic business review and it anticipates taking a restructuring charge in the fourth quarter of 2008. It took a $297 charge in the second quarter.

Shares of LIN rose more than 10 percent Thursday morning on the financial report to above $2.30, still far below its September high of nearly $7.