(Updated, 10 a.m.)
PROVIDENCE – The Providence Journal’s advertising revenue declined somewhat less severely last fall after plunging more than 30 percent earlier in the year, A. H. Belo Corp., the newspaper’s parent company, said Wednesday.
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Dallas-based A. H. Belo posted a profit of $5.65 million, or 27 cents a share, in the three months ended Dec. 31, compared with a net loss of $33.13 million, or $1.62 a share, a year earlier. Revenue fell 15 percent to $135.48 million.
The results, which marked the company’s first quarterly profit since it was spun off from Belo Corp. in 2008, included $5.3 million in one-time charges to write off an old Web content management system and bad investments and to pay severance to former employees.
However, the company described the earnings report as “preliminary,” and said the figures would change once the company’s new auditing firm finishes calculating its future pension obligations.
The news sent A. H. Belo shares up 16 percent to $6.98 at 10 a.m. Wednesday in New York Stock Exchange trading. The stock has more than quadrupled in value since hitting a low of 59 cents last March.
Advertising sales at The Journal, which dropped 32 percent year over year in the first nine months of 2009, posted the smallest percentage decline of the year in the fourth quarter, A. H. Belo CEO Robert W. Decherd said in a statement. The paper’s ad sales fell 18 percent in 2008 and 7 percent in 2007.
The company’s two other large papers, The Dallas Morning News and The Press-Enterprise of Riverside, Calif., also saw a moderation in ad revenue losses during the fourth quarter, Decherd said. Ad revenue fell 23.5 percent and Internet revenue shrank 9 percent companywide.
The moderation in advertising losses at A. H. Belo’s papers toward the end of last year mirrored the trend reported by other publishers such as The New York Times Co. and The E.W. Scripps Co.
“Although macroeconomic and secular challenges remain, A. H. Belo will continue to focus on managing expenses, producing high-quality local content, and delivering value-added circulation to its advertisers,” Decherd said. The company slashed fourth-quarter expenses 34 percent compared with 2008.
The company’s circulation revenue rose 12 percent thanks to price increases at The Journal and The Morning News. The Journal’s weekday circulation fell by nearly 25,000 to 106,875 in the six-month period ended Sept. 30 compared with a year earlier, according to the Audit Bureau of Circulations.
Among A. H. Belo’s three papers, however, The Journal experienced the largest drop in retail advertising sales during the fourth quarter compared with 2008, the company said.
Last November, an A. H. Belo executive said the company planned to start charging people to read at least one of its papers online by the spring. The company did not say on Wednesday whether it is still planning to do that.
For the full year, A. H. Belo posted a net loss of $110.26 million, or $5.37 a share, compared with a net loss of $62.3 million, or $3.04 a share, in 2008. Annual revenue declined 19 percent to $518.35 million.
One-time charges, including $106.4 million worth of write-downs on the value of The Journal and other assets, contributed to the widening of the company’s losses last year.
The company said advertising sales fell 27 percent and Internet revenue dropped 17 percent in 2009, while circulation revenue rose 11 percent. Expenses decreased 11 percent due to job cuts and less spending on newsprint because of lower wholesale prices and a 37 percent reduction in consumption.
The Journal posted the best earnings before interest, taxes, depreciation and amortization among the three papers during both the fourth quarter and the full year, the company reported.
A. H. Belo had 2,300 full-time employees at the end of 2009, down from 2,950 a year earlier. The company’s part-time work force fell to 280 from 400.
As it adjusts to changes in the news industry and a smaller staff, The Journal overhauled the sections of its print edition last summer and introduced a redesign in October. The paper also sold Rhode Island Monthly magazine to its longtime president and publisher, John J. Palumbo, last July.
In addition, The Journal has been trying to sell or lease its five-story, 194,915-square-foot headquarters on Fountain Street for more than a year. The paper recently offered to sell it to the city, which is seeking new administrative offices, for $9.75 million or lease it for $1.17 million a year.
