Hearst-Argyle Posts Flat Earnings for Q1

May 2, 2006  •  Post A Comment

Hearst-Argyle Television reported first-quarter net income of $13 million, down slightly from a year ago, as stock-option compensation and digital-media expenses eroded higher advertising revenue.

The company, which owns 25 large-market television stations, said the company’s profit included $1.9 million in stock-option compensation expense as well as costs associated with the launch of new digital products at its stations’ Web sites, including text-messaging services and weblogs. Revenue advanced 7 percent to $174 million due to higher local advertising revenue driven by political campaign spending and strong sales during the Winter Olympics.

As one of the strongest-performing station groups in the industry, Hearst-Argyle often serves as a bellwether for other pure-play TV station owners, particularly those with local news operations that are tops in the ratings.

Strong local news ratings helped Hearst-Argyle’s stations pull in $2.1 million in political advertising during the quarter, compared with $711,000 a year ago.

The company also reported that nine of its top 12 advertising categories posted gains in the period, including fast-food, telecommunications, pharmaceutical and movies. That offset a slight decline in the automotive category, which accounts for 26 percent of the company’s overall revenue.

Hearst-Argyle also reported a sharp increase in revenue from digital media to $3.2 million from $7,000 a year ago, driven by increased Web site ad revenue and the Weather Plus digital channels. The company also posted an increase in retransmission consent compensation from cable companies to $4.9 million from $1.1 million a year ago.