Journal Q2 Revenues Fall
July 22, 2008 at 5:36 AM (PT)
JOURNAL COMMUNICATIONS second-quarter revenue fell 5% to $140.1 million, the company reported TUESDAY. The company's net earnings dropped from $14.2 million (including a one-time $1.4 million gain from the sale of some of the company's community papers and shoppers) to $9 million. Radio revenues dropped 5% to $20.9 million, with operating earnings off 2.2% to $5.1 million.
JUNE total revenue fell 5.4% to $42.75 million, with the company's radio group off 5.3% to $7.94 million. The drop was attributed to softness in all markets except MILWAUKEE and OMAHA, and a $34,000 decrease in political advertising.
"The economy continued to impact advertising revenues at JOURNAL COMMUNICATIONS during the second quarter," said Chairman/CEO STEVEN J. SMITH. "While television revenue grew in markets like PALM SPRINGS, OMAHA, BOISE and LANSING and radio revenue grew in OMAHA, our larger growth markets continued to experience subdued advertiser spending. Publishing revenue remained soft overall, although our hyper-local community newspapers surrounding MILWAUKEE grew revenue in the quarter. We were also pleased to see continued increases in online advertising revenues at both the publishing and broadcast sites. Total online revenue was up 15.9% in the second quarter to approximately $4.7 million.
"Looking to the second half of the year, we anticipate positive revenue trends driven by political and issue and Olympics advertising spending at our television business.
"We believe our company is strong financially because we have maintained a solid balance sheet while prudently using capital to repurchase shares. We remain focused on diligent cost control. Broadcast headcount is down about 6% in 2008 from year end 2007. On JULY 2nd, JOURNAL SENTINEL announced a plan to reduce its workforce by an additional 10%. We estimate the charge for this to be between $3.8 and $4.0 million, most of which will be recorded in the third quarter. We expect cost savings for the remainder of the year to be between $1.4 and $1.6 million. Full-year net savings are expected to be between $5.6 and $6.0 million.
"We continue to execute on our growth strategy to grow our total audience and expand our presence in our local markets. So far in 2008, JOURNAL BROADCAST GROUP formed a television duopoly in PALM SPRINGS. We expect to close soon on the acquisition of the assets of KWBA-TV to form a television duopoly in TUCSON, and on JULY 1st, we announced an agreement to acquire the assets of KNIN-TV in BOISE, subject to regulatory approval, to form another television duopoly in that growth market."