Hearst-Argyle Profit Declines

Jul 27, 2006  •  Post A Comment

Hearst-Argyle Television, which owns 25 TV stations, posted lower second-quarter profit after tax costs rose. Revenue increased 3 percent on more political advertising sales.

Net income fell 62 percent to $25 million, the company said Thursday in a statement. Revenue increased to $193.9 million compared with $188.5 million a year earlier as advertising and digital sales increased along with cable retransmission income.

Hearst-Argyle took in less compensation from networks and automobile advertising plunged. Political-ad revenue rose more than fivefold to $12.9 million

The stations recorded increases in the retail, telecommunications, financial, attractions, and furniture advertising categories. The automotive category, which represented 27 percent of gross advertising sales, declined 11 percent.

“Our stations generally performed well in the second quarter, growing top-line revenues and advancing our local website businesses,” Hearst-Argyle President and CEO David Barrett said in the statement. “However, isolated weaknesses are evident in several markets, reflecting localized conditions, sluggish automotive ad spending, and some pricing pressure at certain NBC stations as a result of that network’s weakened prime-time ratings.”

Adjusted earnings before interest, taxes, depreciation and amortization declined 6 percent in the quarter to $72.7 million from $77 million in the second quarter due to higher operating expenses and the recognition of stock-based compensation.

The station group announced earnings per diluted share of $0.27 for the quarter compared with $0.68 per share a year ago, when Hearst-Argyle benefited from the tax settlement. Current period results reflect $2 million of new stock-based compensation expense, which represented $0.01 per share on an after-tax basis.