EARNINGS

Saturday, July 28, 2007


Jul. 28, 2007 (McClatchy-Tribune Regional News delivered by Newstex) --
Belo Corp., owner of The Dallas Morning News, WFAA-TV (Channel 8) and other media properties, said profit fell nearly 15 percent in the second quarter compared with the same period a year ago, with the company's newspaper revenue declining sharply.

Dallas-based Belo reported net income in the second quarter of $36.4 million, or 35 cents per share.

That compared with nearly $42.7 million, or 41 cents per share, in the same period last year, although last year's second-quarter results received a boost from a one-time gain of $7.5 million related to a Belo vendor contract.

Despite the decline, the company's second-quarter per-share earnings beat Wall Street's expectations, which averaged 31 cents per share.

'Belo's second-quarter results reflect continued outstanding performance by the company's premier collection of television assets, strong growth in our online businesses and excellent expense management across the company,' said Robert W. Decherd, Belo's chairman and chief executive.

Other media companies such as Gannett Co. (NYSE:GCI) and Tribune Co. (NYSE:TRB) have also reported profit declines for the quarter.

Belo's revenue fell to $390.5 million in the second quarter, 3.2 percent lower than revenue of almost $403.6 million in the second quarter of 2006.

Operating costs fell 2.8 percent due to lower pension expense, lower newsprint and distribution expense, and 2006 staff reductions at The News and the Press-Enterprise in Riverside, Calif.

Peter Appert, an analyst with Goldman Sachs Group Inc. (OOTC:GSGRP) (NYSE:GS) who has a neutral rating on Belo stock, described the company's results as weak but expected. He did cite the drop in Belo's revenue as a source of concern.

'Strong cost discipline in the newspaper segment has helped mitigate the impact of a very challenging revenue environment, but the lack of any meaningful top-line traction at Belo tempers our outlook for both earnings growth and the stock,' Mr. Appert said in a research note.

Belo shares fell 25 cents to $18.39 in Friday trading. That represented a decline of 1.34 percent on a day when the Dow Jones industrial average fell 1.54 percent.

Belo's overall newspaper revenue fell 8.5 percent to $192.3 million for the quarter, down from about $210.2 million in the same period a year ago.

But online advertising for the newspaper group was up 19 percent to $13.6 million.

'Belo's newspaper group results were affected by a soft newspaper advertising environment, but improved vs. the first quarter,' Mr. Decherd said.

Meanwhile, the company's revenue from television rose to more than $198.2 million in the second quarter, up 2.5 percent from the same period a year ago, Belo said. Online advertising for Belo's television station Web sites jumped 48 percent to $7 million.

Newstex ID: KRTB-0046-18486769


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