Q4 pacings have gotten worse since Belo told investors in early November that the quarter was heading down 8%. CEO Dunia Shive updated that Tuesday at the UBS 36th Annual Global Media and Communications Conference in New York to a decline of 10%. As for 2009, it’s hard to predict what revenues will be, except that they will be down from this politically-infused year. The good news for investors, though, is that Belo has reduced operating expenses by 21%.
Commenting on the fourth quarter of 2008, Shive said, "Based on current pacing trends, we expect total revenues to be down around 10 percent. The decline is a little greater than pacing trends indicated in our November update. Political revenues in the fourth quarter totaled $35.8 million. Year-over-year fourth quarter station expense declines should be similar to what we experienced in the second and third quarters of this year. Full year corporate operating costs, exclusive of spin-off charges, are projected to be approximately $32 million, a decrease of 21% from pro forma 2007 corporate operating costs,"
Regarding Belo’s outlook for 2009, Shive said, "The current economic climate makes it very difficult to project advertising revenues for 2009. And, with $56 million in 2008 political revenue, 2009 spot advertising revenues will be lower than 2008. We expect Internet revenues to continue to grow at a double-digit pace in 2009. Retransmission revenues should increase low double digits in 2009."
Shive said Belo management is still working on the 2009 budget process, but expects combined station and corporate operating expenses to be lower in 2009. "Since the end of 2007, the company has reduced its debt by approximately $70 million, including the purchase and retirement of $37 million of Belo’s 2013 and 2027 bonds at a cost of less than $23 million. The company will recognize a taxable gain on these bond repurchases and, at current borrowing rates, would realize approximately $1.7 million in interest savings in 2009 due to these transactions," concluded Shive.
