Political Dollars Power Meredith’s Local Media Arm


Meredith Corp. on Friday morning released its fiscal Q4 and full-year 2018 results, and the company’s Local Media division, which includes its broadcast TV stations, saw revenue gains. But, it was political growth in the final three months of its fiscal year that propelled TV revenue increases.

Minus political, “other revenues” were to thank — not core advertising.

For the three month period ending June 30, local media revenue grew to $198.9 million, from $152.2 million.

This was fueled by “other revenue” improvement to $105.1 million, from $56.9 million.

Meanwhile, some $10.3 million in political advertising was seen, up from $4.4 million in the same period of 2017.

Core advertising was weak, and slipped to $83.5 million from $90.9 million.

For the full-year, non-political advertising rose to $354.2 million, from $351.5 million. As a result, total local media revenue increased to $693.1 million, from $630.1 million.

In fiscal Q4, local media operating profit grew to $58.8 million, from $46.3 million.

Adjusted EBITDA for the division advanced to $68.5 million, from $56 million.

The addition of WPCH-17 in Atlanta, creating a duopoly with CBS affiliated WGCL-46, and stronger performance in markets such as Phoenix and St. Louis, had a positive impact on Meredith’s non-political advertising — making the dip a bit less painful than it could have been.

What’s the Local Media forecast for 2019? Meredith expects fiscal Q1 revenue to fall in the $200 million-$210 million range. For the full fiscal year, total company revenue is expected to range from $3 billion to $3.2 billion.

That’s a substantial increase from FY 2018, as total company revenue came in at $2.25 billion, rising from $1.71 billion.

Here’s the problem: Net earnings are off for both fiscal Q4 and for full-year 2018, with the company swinging from per-share earnings of 97 cents in Q4 2017 to a loss of six cents per share in the just-completed quarter.

Meredith’s Local Media Group includes 17 television stations reaching 11 percent of U.S. households.

While Simply Wall St. asked in a blog if Meredith Corp. will “continue to underperform the industry,” the overall net earnings decline appears to be a negative with stockholders.

As of 1:45pm Eastern MDP was off 5.5%, to $50.30, on slightly heavier-than-average volume.

Meredith stock carries a 1-year target estimate of $62 and has struggled since a Feb. 1 plunge from the $66 range. It reached a 52-week low of $47.85 on June 5.