Media General Takes 11% 3Q Revenue Hit

Media General Inc., a multimedia provider of broadcast television, digital media and print products, today reported operating income for the third quarter of 2011 of $5.7 million, a 50.5% drop compared to operating income of $11.5 million in the 2010 third quarter.

A net loss in the current quarter, including non-cash impairment of $26.6 million, was $29.8 million, or $1.32 per share, compared with a net loss of $10.7 million, or 48 cents per share, last year.

Total revenues were $144.7 million, compared with $163.2 million last year, an 11.4% decrease. The 2010 quarter included $9.7 million of political advertising and $1.2 million of BP image advertising related to the Gulf of Mexico oil spill. The current quarter included $1.3 million of political revenues.

“Media General’s third-quarter results reflected an expected but significant drop in political revenues in this off-election year as well as general economic uncertainty,” said Marshall N. Morton, president-CEO. “A lack of clarity in the global financial markets, significant uncertainty regarding the U.S. government’s plan of action domestically and a downward turn in the economy all contributed to a further softening of the advertising market. Excluding political advertising, broadcast revenues for the quarter decreased 2.4%. Broadcast cash flow was $19 million.”

Morton continued: “Despite a challenging economic environment, Media General has several positive catalysts on the horizon. In the fourth quarter, we are seeing a welcome strengthening in automotive advertising. We may see political revenues advance into the latter part of this year from early primaries in Florida and South Carolina.

“Fourth-quarter broadcast pacings are 9%-11% ahead of last year, excluding political advertising. Looking to 2012, we expect significant political revenues as well as advertising from the Summer Olympics and the Super Bowl on our eight NBC stations. This positive outlook notwithstanding, as our properties develop budgets for 2012, core revenue assumptions will be appropriately conservative, and expenses will be scaled to the revenue opportunity a particular market is expected to generate.

“We continue to accelerate our digital strategy, including new ways to be paid for our content. We have differentiated local content that people need, top-rated local news and strong local advertiser relationships to support our plans to increase cash flow generation,” Morton added.

Read the company’s report here.