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Meredith Stations Down on Political and Auto

DES MOINES, IOWA:Fiscal 2010 first-quarter revenues for Meredith’s 12 TV stations came in at $61 million, down from $70 million last year. Operating profit was $2 million compared to $11 million, attributed to a $5 million dip in political advertising and continued weakness in automotive.

Non-political revenues were $60 million, a decline of 7 percent from F1Q09 but up 20 percent from the most recent quarter. Automotive contributed to more than half of the decline.

“Advertising revenues across our core businesses outperformed both the magazine and television industries in the quarter,” Meredith president and CEO, Stephen M. Lacy said.

Revenues from retransmission fees nearly doubled in the first quarter of fiscal 2010 from the prior-year period. Meredith renegotiated of retransmission agreements with the seven major cable operators in its markets. Revenues at Meredith Video Solutions, the company’s in-house video production group, grew, driven by corporate clients and expansion of its “Better” syndicated daily TV show.

Broadcast expenses declined 2 percent in F1Q10 compared to the prior-year period. Meredith continued cut costs and centralize master control, traffic and research across its television stations. The fiscal benefits are expected to materialize in the second have of FY2010.

Revenues from Meredith’s print, broadcast and digital properties combined totaled $332 million, compared to $364 million in the prior-year period. Earnings per share were 40 cents compared to 41 cents last year. A benefit of 6 cents a share reflected a favorable tax adjustment. Without it, EPS came in at 34 cents, in line with expectations.

Shares climbed a bit in early trading, from around $29.50 to $29.88 before dropping to around $28.50.

Meredith (NYSE; MDP) said print advertising revenues are currently down in the “mid single-digit range” as it considers fiscal 2Q2010. Broadcast will be up against $17 million in net political ad revenues from the year before. The company expects F2Q10 EPS of 33 to 38 cents.

“Looking to the remainder of fiscal 2010, there is limited visibility into customers’ advertising budgets, which generally reset effective Jan. 1,” the company said in its earnings release. “Meredith continues to expect fiscal 2010 earnings per share to range from $1.60 to $2,” excluding the tax adjustment.

Meredith finished the quarter with cash and equivalents of $14,259, compared to $27,910 at the end of F4Q09. Long-term debt was $285,000 compared to $380,000.
-- Deborah D. McAdams

More on Meredith:
July 29, 2009: “Meredith Fiscal 4Q TV Revenues Drop 21 Percent”
Shares of Meredith Corp. slipped this morning on the company’s reported loss of $3.64 a share for its fiscal fourth quarter and $2.28 for its fiscal year ending June 30.

May 15, 2009:Meredith Declares Dividend
Meredith Corp. declared a dividend Wednesday of 22.5 cents a share.

January 21, 2009: “Meredith 2Q Station Revenue Down 20 Percent”
The company’s 12 TV stations generated $84 million in the quarter compared to $88 million a year ago.

November 24, 2008: “Meredith TV Station Earnings Down”
The 12 Meredith Corp. stations generated $70 million in revenue for the company’s first quarter of fiscal 2009 compared to $75 million a year ago.