Tax Benefits Contribute to Hearst-Argyle Profit Hike

Jul 28, 2005  •  Post A Comment

A sharp slowdown in political advertising revenue plus a pair of tax benefits led to a mixed second quarter for station group Hearst-Argyle Television, which reported Thursday a decline in revenue but a sharp increase in profit.

Hearst-Argyle, which owns 25 network-affiliated stations, reported that its second-quarter profit nearly doubled to $65.6 million, compared with a profit of $36 million a year earlier. Revenue, meanwhile, slipped nearly 5 percent to $188.5 million.

The profit gain was largely the result of a $31.9 million tax benefit related to the company’s settlement with the Internal Revenue Service over the company’s tax returns, as well as a $5.5 million benefit linked to a tax-law change in Ohio, where the company owns a television station.

On the revenue side, Hearst-Argyle wasn’t able to overcome a nearly $10 million decline in political advertising spending or a $2.6 million decrease in network compensation. But there were some bright spots, with the company recognizing a revenue gain from its acquisition of WMTW-TV in Portland, Maine, retransmission revenue from satellite companies and growth in six of the company’s 10 top advertising categories.