Graham 1Q TV Revenue Grows 7%
Graham Holdings Co. reported first quarter 2020 earnings that included revenue from its television broadcasting division, Graham Media Group, of $115.4 million, an increase of 7% from $108.2 million in the same quarter of 2019.
The revenue increase is due to a $9.7 million increase in political advertising revenue and a $0.6 million increase in retransmission revenues.
In the first quarter of 2020 and 2019, the television broadcasting division recorded $0.3 million and $1.8 million, respectively, in reductions to operating expenses related to property, plant and equipment gains due to new equipment received at no cost in connection with the spectrum repacking mandate of the FCC.
Operating income for 1Q 2020 increased 1% to $35.8 million, from $35.5 million in the same period of 2019, due to increased revenues, offset by higher network fees and a reduction in property, plant and equipment gains.
The company as a whole, Graham Holdings, had 1Q revenue of $732.3 million, up 6% from $692.2 million in 1Q 2019, largely due to the acquisition of two automotive dealerships in January 2019 and the acquisition of Clyde’s Restaurant Group in July 2019.
Revenues grew at healthcare and television broadcasting, partially offset by declines in education.
The company reported operating income of $8.1 million for the first quarter of 2020, compared to $40 million for the first quarter of 2019. The operating income decline is largely driven by lower earnings in education and other businesses, partially offset by improvements in manufacturing and healthcare results and a decline in corporate office expenses.
Graham said the coronavirus pandemic and measures taken to prevent its spread, such as travel restrictions, shelter in place orders and mandatory closures, “significantly impacted the company’s first quarter 2020 results, largely from reduced demand for the company’s products and services.
“This significant adverse impact is expected to continue in the second and third quarters of 2020, and through the end of 2020. The company’s management is taking a variety of measures to reduce costs and capital expenditures.”
It also said the postponement of the 2020 Summer Olympics and overall reduced advertising demand due to the COVID-19 pandemic are expected to negatively impact advertising revenue and the operating results at the television broadcasting division for the remainder of 2020.
Read the company’s report here.