Belo Closes Two News Channels, Reports 16 Percent Surge in Q2 Earnings

Jul 23, 2004  •  Post A Comment

Newspaper and station group owner Belo Corp. on Friday said it shuttered two 24-hour cable news channels in Texas that it had operated in a joint venture with Time Warner Cable, even as the company reported higher second-quarter earnings.

The channels, News 24 Houston and News 9 San Antonio, were closed immediately Friday, with all 190 employees at those two channels losing their jobs. Control of a third all-news cable network in Charlotte, N.C., that Belo and Time Warner had jointly run will be handed over to Time Warner, which already operates several 24-hour cable news channels.

The joint venture with Time Warner proved to be a money loser for the Dallas-based Belo, with the company losing $18.7 million since the partnership began in September 2000. In the first and second quarters of 2004 alone, the company lost $3.1 million and $2.6 million, respectively. Belo’s total investment in the venture was $37.8 million.

Though losses from the venture will be small in the third quarter, Belo said it has yet to determine the size of an impairment charge associated with the discontinuation of the venture.

Meanwhile, Belo on Friday also reported a 16 percent surge in second-quarter profit to $45.6 million, versus $39.4 million a year ago. On a per-share basis, Belo’s net income was 39 cents, compared with 34 cents a year ago. Revenue rose 6 percent to $391.1 million.

The company’s 19 television stations reported a 6 percent rise in revenue to $181.3 million, while earnings from operations rose 9 percent to $72.7 million. Spot-advertising revenue rose 7 percent, driven largely by political advertising spending, which totaled $7.5 million in the second quarter. The company cited heavy political spending at its stations in Arizona, Missouri, Oregon and Washington state. Local advertising revenue increases outpaced national, with local booking a 4 percent increase, compared with national’s 1 percent increase.