2Q Revenue Drops at Journal

Journal Communications: Larger growth markets continued to experience subdued advertiser spending.
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Second-quarter revenue at Journal Communications was $140.1 million, down 5% from the same quarter a year ago.

Earnings from continuing operations were $9 million for the second quarter compared with $12.7 million last Q2, a decrease of 29%.

Journal also reported that broadcast headcount was down 6% since the end of 2007 as the business environment continues to sputter.

"The economy continued to impact advertising revenues at Journal Communications during the second quarter," chairman and CEO Steven J. Smith said. "While television revenue grew in markets like Palm Springs [Calif.], Omaha [Neb.], Boise [Idaho] and Lansing [Mich.] and radio revenue grew in Omaha, our larger growth markets continued to experience subdued advertiser spending.”

He continued, “Publishing revenue remained soft overall, although our hyperlocal 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.”

Smith forecasted a positive Q3 and Q4 thanks to political money, the Olympic Games and multiple new duopolies.

“So far in 2008, Journal Broadcast Group formed a television duopoly in Palm Springs,” he said. “We expect to close soon on the acquisition of the assets of KWBA-TV to form a television duopoly in Tucson [Ariz.], and on July 1, 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."

Broadcasting revenue decreased 4.6% in the second quarter to $53.5 million. Total broadcast political/issue advertising revenue was $700,000 compared with $500,000 and broadcasting operating earnings of $9.7 million were down 14.1%.

Journal’s station revenue decreased 4.3% to $32.6 million in the second quarter, while operating earnings from television stations decreased 24.4% to $4.6 million in Q2 2008. Journal attributed that drop to “the declines in revenue at our Tucson, Fort Myers/Naples [Fla.], Milwaukee and Las Vegas stations.”

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