Media General Revenue Drops, Layoffs Continue
Media General cites weak economy, continued publishing woes, will take noncash impairment charge.
By Michael Malone -- Broadcasting & Cable, 7/17/2008 7:11:00 AM
Citing a weak economy and continued publishing woes, Media General reported a second-quarter loss from continuing operations of $1.4 million, or 6 cents per diluted share, compared with income from continuing operations of $4.3 million (19 cents) in the same quarter a year before.
Second-quarter revenues were $204.88 million, down from $228.215 million in the second quarter of 2007.
Media General said it taking a noncash impairment charge in the second quarter of $500 million-$550 million, after tax.
“We determined that, in view of the continued economic slowdown and the market’s perception of media-industry equity valuations, this was the appropriate time to undertake the impairment testing,” president and CEO Marshall Morton said. “The charge is noncash and will not impact our ability to operate, reduce debt or move forward with our ongoing transition to the digital world.”
The company also said downsizing will continue. “We continue to implement aggressive performance-improvement actions, including work-force reductions, to better align expenses with current business conditions,” Morton said. “Total operating costs in the second quarter, excluding severance charges, decreased approximately 6%.”
Media General’s broadcast division showed a profit of $14.9 million for the quarter, down from $18 million in the same quarter a year ago. Total broadcast revenue dropped 5.7%. Total political revenue was $2.8 million as presidential, gubernatorial and congressional races heat up.
Media General’s interactive-media division showed a quarterly loss of $656,000, compared with a profit of $359,000 last second quarter. But the division posted record revenues of $10.6 million, up 13.7%.
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