Journal Communications had a strong Q2 with operating earnings up 17% driven by political and issue advertising and a continuing recovery in many of its local broadcast markets. Revenue of $95.5 million increased 6.0% compared to $90.1 million. Operating earnings of $13.5 million increased 17.1% compared to $11.5 million. Net earnings were $7.6 million compared to $6.1 million.
In the quarter, basic and diluted net earnings per share of class A and B common stock were $0.13, or $0.14 excluding a $1.0 million pre-tax publishing workforce reduction charge, compared to $0.10.
The operating margin was 14.1% for the second quarter compared to 12.8%. EBITDA (net earnings (loss) excluding the earnings/loss from discontinued operations, net; total other expense, net; provision (benefit) for income taxes; depreciation; amortization; and, if any, non-cash impairment charges) was $19.4 million compared to $17.3 million, an increase of 11.7%. For Q2, total expenses of $82.0 million increased 4.4% compared to $78.6 million.
Broadcasting revenue increased 18.4% to $54.5 million compared to $46.1 million. Total broadcast political and issue ad revenue was $5.7 million compared to $0.9 million. Core broadcast revenue, excluding political and issue advertising revenue, increased 8.1% to $48.8 million compared to $45.2 million. Core local and core national advertising revenue increased 2.8% and 23.0%, respectively, primarily due to an increase in automotive advertising. Retrans. revenue was $2.8 million compared to $2.1 million.
Broadcasting operating earnings of $13.1 million increased 57.4% compared to $8.3 million.
Revenue from television stations for Q2 increased 22.5% to $35.1 million compared to $28.7 million.
Said Journal CEO Steve Smith in the call, regarding broadcast revenue: “The core growth we delivered in the quarter is important, given it was accomplished amid the political issue advertising that frequently crowds out or challenges our growth. Also, our Ft. Myers and Las Vegas television stations saw some improvements in their ratings book, although ratings elsewhere were mixed. In Wisconsin, our sales team has begun selling our new Packers pre-season network, which we are launching in August.”
Hear his comments, along with other execs in the call, here:
[audio:Journal-Q2-072612.mp3|titles=Steve Smith, CEO, Journal]Excluding political and issue ad revenue of $5.2 million in 2012 and $0.7 million in 2011, revenue from television stations increased 7.1%. Core local advertising revenue decreased 2.2% primarily due to a decrease in medical and communications advertising and the impact of political and issue advertising displacement of available local ad spots. Core national ad revenue increased 26.2% primarily due to an increase in automotive and supermarket advertising. Operating earnings were $8.7 million compared to $4.3 million, an increase of 100.5%. Television operating expenses increased 8.6% primarily due to increases in employee related expenses and network fees.
Revenue from radio stations increased 11.5% to $19.4 million from $17.4 million, or 6.7% excluding $0.8 million of revenue from the LMA for two Tulsa radio stations acquired early in the third quarter. Excluding political and issue ad revenue of $0.5 million in 2012 and $0.2 million in 2011, revenue from radio stations on a same-station basis increased 4.8%.
Core local revenue increased 9.5% or 4.6% on a same-station basis primarily due to an increase in automotive advertising. Core national revenue increased 12.8% or 7.1% on a same station basis primarily due to an increase in media and other services advertising. Operating earnings from radio stations were $4.4 million compared to $4.0 million, an increase of 10.7%, or 8.5% excluding $0.1 million related to the Tulsa LMA. Radio operating expenses increased 11.8% or 6.1% on a same station basis, primarily due to increases in employee related expenses and new Tulsa radio station transaction and LMA costs.
Publishing revenue decreased 6.9% to $41.1 million compared to $44.1 million, largely due to continued decreases in the classified, national and retail advertising categories. Operating earnings from publishing were $2.4 million compared to $5.4 million, a decrease of 54.9%. Total newsprint and paper expense in publishing was $4.2 million compared to $4.5 million, a 5.2% decrease, primarily due to a reduction in newsprint consumption.
Revenue at the daily newspaper for Q2 decreased 4.1% to $35.2 million compared to $36.7 million. Retail advertising revenue decreased 2.1%. Classified advertising revenue decreased 20.7% driven primarily by a decrease in the auto and employment categories. Digital advertising revenue of $3.0 million was up 1.1%, primarily due to an increase in sponsorships and other digital advertising revenue that was largely off-set by declines in classified digital advertising revenue.
Community newspapers and shoppers revenue for the second quarter decreased 21.2% to $5.8 million compared to $7.4 million. Excluding revenue of $1.1 million related to Florida operations sold in 2011, revenue decreased 7.4%. Operating earnings from community newspapers and shoppers was $0.4 million compared to $1.1 million, a decrease of 60.4%. Excluding Florida operating earnings of $0.3 million in 2011, operating earnings of $0.4 million would have declined 45.1%. Operating expenses were down 14.5% or 2.0% lower excluding $0.8 million of Florida related expenses.
For Q3, Journal anticipates broadcast revenue to increase in the low-double digits, compared to the prior year, driven by an improving economy, higher political and issue ad revenue in key states and Olympic revenue at their NBC-affiliated TV stations. They anticipate publishing revenue to decline in the mid-single digits, compared to the prior year, excluding revenue from the Florida community newspaper operations sold in 2011, reflecting continued challenges with publishing ad revenue.
