Earnings: Media General's Online Revs Rise 24.5 Percent Amid Operating Loss
This story was written by David Kaplan.
Newspaper publishers have had such a tough time lately mustering confidence that digital revenues will keep rising. At least this quarter, Media General (NYSE: MEG), which swung to a $21.3 million ($0.96 per share) loss compared to last year's $20.3 million loss, was able to show some growth for online, as its interactive division was up 24.5 percent, mostly due to strong sales from its new online coupon and shopping site DealTaker.com. The unit still posted an operating loss of $1.1 million.
Despite the halt in local online ad spend, Media General's saw revenues in that segment grow 31 percent, which the publisher of The Tampa Tribune, Richmond Times-Dispatch and 20 dailies attributed to the addition of more direct-sales initiatives in several markets.
Online classifieds, national fall: Online would have been better, but there was no escaping the recession-driven declines in classified and national advertising of 36.2 percent and 7.2 percent, respectively. Like many newspaper publishers, Marshall N. Morton, president and CEO, said in a statement that he was placing a lot of hope managing those categories' declines by using the ad targeting offerings being rolled out by Yahoo (NSDQ: YHOO) through its APT programthough Yahoo could sell its stake in HotJobs, which is a major component of its Newspaper Consortiumand in the online real estate ad sales alliance run by Zillow. More after the jump.
Earnings release | Webcast (11:00 AM EDT)
Revenues down 18 percent: In general, the Richmond, VA.-based publisher's losses were driven by a severance expense of $4.5 million ($0.20 per share) and an 18 percent decline in total revenues. In addition to layoffs, Media General ramped up cost cutting efforts in other areas in Q1, including suspending its match to the 401(k) Plan and imposing 10 unpaid furlough days for all employees spread across the first three quarters of the year. The board also suspended dividend payments. Lastly, the publisher recently shuttered its Washington DC bureau.
By David Kaplan