If the quarterly results of five station groups are any indication, fears of continued weakness in the advertising market and worries that political advertising spending might not meet expectations are abating.
The station groups-Gannett, The New York Times Co., E.W. Scripps Co., Tribune and Emmis Communications-all reported robust station revenue in the quarter as each benefited from a combination of increases in local and national advertising spending and a healthy bounce in political advertising.
What’s more, a pair of station groups on Wednesday said their first-quarter revenue numbers would beat previous estimates, thanks to political ad spending.
Tribune, which owns 26 television stations and owns a stake in The WB network, said its broadcast and entertainment division posted a 7 percent increase in operating profit to $97 million in the first quarter, while revenue rose 4 percent to $329 million. At its TV stations, revenue rose 6 percent to $306 million, while operating profit climbed 9 percent to $102 million, largely on the strength of gains in auto and financial services advertising.
However, those results weren’t enough to offset investments losses at the company, which reported a 15 percent decline in first-quarter profit to $120.7 million, or 35 cents a share, compared with a year-earlier profit of $141.2 million, or 41 cents a share. Revenue rose 3 percent to $1.3 billion. The losses related to value declines of derivative instruments and a related Time Warner investment.
Scripps reported a 34 percent jump in first-quarter profit to $70.5 million, or 86 cents a share, compared with $52.7 million, or 65 cents a share, a year ago. Revenue rose 15 percent to $514 million. The company said that its Scripps Networks, the division that runs cable channels Food Network, Home & Garden Television, DIY-Do It Yourself Network and Fine Living, fueled most of the growth in the quarter, posting a 50 percent surge in profit to $62.3 million and a 36 percent jump in revenues to $159 million.
Advertising revenue at Scripps Networks climbed 31 percent to $122 million, while affiliate-fee revenue soared 53 percent to $33.9 million. Programming costs rose 39 percent to $38.1 million.
The company’s 10 broadcast stations contributed to the bottom line with political advertising reaching $4.2 million in the quarter, surpassing both the first quarter 2000 take of $1.7 million and the year-ago figure of $200,000. The 2004 quarter’s political revenue also beat the $3.8 million that Scripps’ six ABC affiliates brought in from their carriage of the 2003 Super Bowl. The strong advertising results helped the broadcast division post a 10 percent rise in profit to $17.2 million on an 8 percent increase in revenue to $75.7 million.
Scripps’ newest segment, the Shop at Home Network, generated strong results as well, posting a 27 percent increase in revenue to $74 million. The unit reported a narrowed loss of $3.6 million vs. year-earlier red ink of $5.9 million.
Gannett, which owns 22 TV stations, said its station group recorded a 7 percent increase in revenue to $169.5 million from a year-earlier level of $158.2 million in the first quarter, largely due to increased political advertising spending, which the company projected would exceed $90 million in 2004.
The station group also reported a 9 percent increase in operating cash flow to $77 million.
Those results led the overall company to post a 10 percent increase in first-quarter profit to $274.4 million, or $1 a share, compared with a year-ago figure of $249.8 million, or 93 cents a share. Revenue rose 11 percent to $1.7 billion.
The New York Times Co. said its eight television stations reported a 9 percent increase in revenue to $35.1 million, while operating profit climbed 30 percent to $6.4 million. The company cited an increase in political advertising spending as the trigger for the increases.
The station group’s results contributed to the company’s 2 percent rise in revenue and helped to offset an increase in expenses.
Nevertheless, the company still reported a 15 percent decline in profit to $58.4 million, or 39 cents a share, versus $68.8 million, or 45 cents a share, a year ago.
Emmis said its 16 television stations reported 9 percent increase in revenues to $56.4 million for the fiscal fourth quarter ended Feb. 29, and a 1 percent increase to $235.9 million for the full fiscal year.
That helped the Indianapolis-based company post an 8 percent increase in revenue to $136.9 million for the fiscal fourth quarter, and a 5 percent increase to $136.9 million for the full year.
However, the company reported a widened fiscal fourth-quarter loss of $23.7 million, or 43 cents a share, compared with a year-ago loss of $7.4 million, or 14 cents a share, due to charges related to discontinued operations and an accounting-rule change.
For the year, Emmis reported a narrowed loss of $6.7 million, or 12 cents a share, compared with a loss of $173.5 million, or $3.27 a share, a year earlier.