DALLAS – A.H. Belo Corp. (NYSE: AHC), parent of The Providence Journal Co., posted first-quarter loss of $8.7 million or 43 cents per share. That represents a 7.4-percent decline from its $9.4 million or 46 cents per share loss in the first quarter of 2007, when it was the newspaper segment of Belo Corp. (NYSE: BLC).
First-quarter revenue fell 8.8 percent year-over-year to $160.2 million, the company said. Internet revenue amounted to $12 million, or 7.5 percent, of the first-quarter total.
The new company “is navigating through a challenging operating environment,” Robert W. Decherd, its chairman, president and CEO, said in a statement yesterday. “But I am confident about the quality of our markets long-term, the strengths of AHC’s brands, and our ability to continue to transform AHC in an Internet-centric media world.”
A.H. Belo – spun off at the end of January (READ MORE) – owns and operates three daily newspapers, the Journal, its flagship Dallas Morning News and The Press-Enterprise of Riverside, Calif.; a variety of specialty publications for the youth and Hispanic markets; the Web sites associated with its publications; and direct-mail and commercial printing businesses.
“Like other newspaper companies, AHC was affected by economic and operating pressures in the first quarter,” the company said in its report. “The Dallas Morning News contributed over 64 percent of the company’s revenue in the quarter and did better than its peer group in revenue performance. Revenue declines in Providence were in line with industry trends, while Riverside’s revenue performance was weaker.”
Total print and Internet advertising revenue fell 12 percent compared with the 2007 first quarter, lagging the newspaper industry’s 9.4-percent average decline in 2007. Advertising revenue for the Journal fell 10.7 percent during the quarter, the company said during a conference call with analysts.
First-quarter circulation revenue increased 5.4 percent, led by a 12-percent increase at the Morning News.
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Corporate expenses were flat compared with a year ago, the company said. Meanwhile, newspaper expenses fell $5.3 million, or 3.5 percent, compared with allocated costs from the 2007 first quarter. Newsprint expenses fell $2.9 million, the company said, but only $600,000 of those savings came from lower newsprint costs, while the remaining $2.3 million came from lower consumption.
In a letter to investors last week, Decherd, 57, had noted that “The newspaper industry is operating in a very tough environment – an environment unprecedented in the past 60 years,” and said that 2008 would be “very difficult” for the new company. A.H. Belo’s plans, he wrote, include shrinking the size of its publications to save $1.4 million per year on newsprint; raising cover prices to boost revenue by $6 million per year; and narrowing circulation areas to eliminate remote areas that don’t interest advertisers. (READ MORE)
The “web-width reduction project” to narrow its publications will be completed in early 2009, the company said in its first-quarter report. And to further pare newsprint expenses, A.H. Belo said it will be discontinuing “bonus days” and other third-party circulation.
Going forward, “AHC is only providing general financial guidance due to the volatile U.S. economic environment,” the company added. “Weak economic trends suggest that the Company is likely to see a decline in advertising revenue throughout 2008. A principal driver of this revenue decline will likely continue to be The Press-Enterprise.”
For more information about A.H. Belo Corp. (NYSE: AHC) – formerly the newspaper group of Belo Corp. (NYSE: BLC) – visit www.ahbelo.com .
