The company's stations in Texas and Florida ran extensive commercial-free coverage of Hurricanes Harvey and Irma that adversely impacted revenues by an estimated $2.1 million and resulted in $600,000 in additional expenses during the quarter.
Hurricanes Cost Graham $2.7M In 3Q
Graham Holdings Co. on Wednesday reported third quarter earnings that included revenue from its television broadcasting division, Graham Media Group, of $101.3 million, a decrease of 10% from $112.4 million in the same quarter of 2016.
In the third quarter of 2017, the company’s televisions stations in Texas and Florida ran extensive news programming coverage of Hurricanes Harvey and Irma; this adversely impacted revenues by an estimated $2.1 million and resulted in $600,000 in additional expenses during the third quarter of 2017.
Excluding revenue from two stations acquired in January 2017, revenue declined 15% due to $13.1 million in third quarter 2016 incremental summer Olympics-related advertising revenue at the company’s NBC affiliates, an $8.1 million decrease in political advertising revenue, lower network revenue and the adverse impact of the hurricanes, offset by $6.0 million in higher retransmission revenues.
The company’s NBC affiliates in Houston and Detroit are operating under a new contract with NBC effective Jan. 1, 2017, that has resulted in a significant increase in network fees in 2017, compared to 2016.
Operating income for the third quarter of 2017 decreased 44% to $32.9 million, from $59.2 million in the same period of 2016 due to lower revenues and the significantly higher network fees.
The company as a whole, Graham Holdings, had 3Q revenue of $657.2 million, up 6% from $621.6 million in the third quarter of 2016. Revenues increased in other businesses, offset by a decline at the education and television broadcasting divisions.
The company reported operating income of $44.6 million for the third quarter of 2017, compared to $68.0 million for the third quarter of 2016. The operating income decline is driven by lower earnings at the television broadcasting and education divisions, offset by an increase in other businesses.
Read the company’s report here.