TV counters print plunge at Media General; dividend suspended


Media General has suspended dividend payments, citing the “uncertain economic outlook. That news and its Q4 results sent the company’s stock down 23.9% on Thursday.

Broadcasting profits rose 2.6% in Q4, but that was not enough to wipe out a 57.2% decline at the newspaper division. Excluding an impairment charge, net income from continuing operations was $8.6 million, down from $10.2 million a year earlier. But with the political season over for TV, monthly figures for December were more ominous. TV time sales dropped 22.9%, even worse than the 18.5% drop in newspaper ad sales. Interactive Media Division revenues rose 17.1% for the month.

"The Publishing Division’s lower fourth-quarter results were due to the continuation of the declining economic trends that we have experienced all year, particularly in Florida. In the Broadcast Division, strong Political revenues largely offset lower National and Local transactional sales,” CEO Marshall Morton said of the Q4 results.

Excluding severance expenses, broadcast division profit in Q4 was down 2.6% to $24.3 million. Political revenues were $23.4 million, but even with that total broadcast time sales fell 7%. Local was down 25.6% and national 30.6%. Lower auto advertising was the main factor driving down both local and national.

"The Interactive Media Division generated revenue growth of 10%, which was driven by strong holiday sales on our new online coupon and shopping Web site, and a 43% increase in Local advertising. Our total online audience growth continued in the fourth quarter, driven significantly by continuous news offerings on all sites. Page views were up 10.1%, visitor sessions increased 23.2% and unique visitors rose 30.1%," said Morton.

Media General hasn’t been providing Wall Street with specific forward guidance, but the outlook is obviously not rosy. Thus, the decision to suspend quarterly dividend payments. "While we regret having to take this action, this allows the company to direct additional cash flow to the reduction of our debt," said Morton. The company did note during the conference call with Wall Street analysts that while January TV sales were again down year over year, the decline was not as great as in December – but no one is yet claiming that any turnaround has begun.