Revenues at Journal Broadcast Group were up 8.6% in Q1. Even so, the newspaper business was still down and Journal Communications saw total revenues decline 3% for the quarter. Look for that to continue in Q2.
“Even with improved revenue expected in our broadcast segment in the second quarter of 2010, we expect overall company revenue in the second quarter to lag the prior year period with challenges in publishing advertising and printing services revenue. However, our results will benefit from our lower cost structure and we intend to execute our local market business strategy in order to position Journal for a return to top-line growth,” said CEO Steve Smith.
There was some good news to report. “We generated a significant increase in operating earnings in the first quarter despite a decline in publishing and printing services revenue. Ongoing discipline in expense management and aggressive action throughout the last year has substantially driven down our overall cost platform. In addition, the high operating leverage of the broadcast segment has allowed much of our increase in revenue to drop directly to operating earnings, further improving our financial results,” Smith said.
In Q1, broadcasting revenue increased 8.6% to $42.6 million. Core (excluding political and Olympic) local grew 0.6% and national decreased 2.3%. Olympic revenue was $2.2 million. Total broadcast political and issue advertising revenue was $0.7 million compared to $0.1 million a year earlier. Retransmission revenue was $1.6 million compared to $1.3 million. With the increase in revenues and reduced overhead due to cost-cutting, broadcasting operating earnings shot up 348.5% to $7.7 million, compared to $1.7 million a year earlier.
Revenue from Journal’s TV stations increased 9.4% to $28.4 million. Television political and issue advertising revenue was $0.7 million in Q1 2010. Operating earnings were $5.1 million, compared to $0.6 million. Television operating expenses (including KNIN-TV acquired in April 2009) were down 8.2% compared to last year due to the reduction in employee related costs and other cost reduction initiatives implemented in 2009, the company said.
Q1 revenues from Journal’s radio stations increased 7.1% to $14.2 million. Radio political and issue advertising revenue was $0.1 million, the same as a year earlier. Operating earnings from radio stations were $2.6 million, compared to $1.1 million in Q1 2009. Radio operating expenses decreased 4.3% due to the reduction in employee related costs and other cost saving initiatives.
Publishing revenues, however, fell 7.4% to $44.6 million, with declines in all revenue categories. However, the operating loss of $0.6 in Q1 of 2009 turned to an operating profit of $3.4 million this year, due to cost reductions.
“For the second quarter of 2010, we anticipate that publishing and printing services segment revenues will be down compared to the prior year period reflecting continued challenges with publishing advertising revenue and printing volumes. Broadcasting segment revenues are expected to be up compared to the prior year period helped by local, national and political television advertising,” Journal Communications said in its official guidance to Wall Street.
