Just about any way you slice it, Media General
The Richmond-based company operates three metropolitan newspapers: The Tampa Tribune, the Richmond Times-Dispatch, and the Winston-Salem Journal. It also publishes 22 daily community newspapers, about 150 weekly newspapers and other publications, and operates 23 network-affiliated television stations.
Media General was aided in the recent quarter by an extra week of sales and operations; by the existence of four new television stations that were bought in June; and by the boost to revenues from the national elections that occurred in November. The 2006 quarter included 14 weeks, versus 13 in the year-earlier period. Elections advertising contributed $34.4 million to quarterly revenues -- primarily on the broadcast side -- compared with just $375,000 in the December 2005 quarter.
With these additional benefits in the quarter, the company grew its total revenues by 26% to $294.7 million, of which about $18.5 million was attributable to the additional week. Without the new stations, total revenues would have grown about 10.7% in the quarter. Net income rose just more than 26% to $31.6 million, or $1.33 per share, from the $25.0 million, or $1.05 per share, for the final quarter in 2005.
Media General's results followed those of Dow Jones
Beyond its revenues and earnings, Media General saw its EBITDA (earnings before interest, taxes, depreciation, and amortization) increase 41% to $84.8 million in the quarter, while its free cash flow (after-tax cash flow minus capital expenditures) precisely doubled to $26 million.
So, despite operating in a difficult climate, Media General performed strongly in the quarter. Nevertheless, I'd urge Fools to be cautions about buying the company's stock. The reason: Management foresees flat to slightly increasing revenues in the first quarter from both its publishing and broadcasting units.
Beyond that prognostication, if one looks at the nearly across-the-board expectations of both media analysts and those publishing and broadcast companies that have taken a gander at predicting trends for all of 2007, there appears to be little reason to expect any sort of revenue surge in the later quarters. Therefore, with its comparisons likely to be difficult, Media General probably deserves to be watched -- but no more at this time.
For related Foolishness:
- Dow Jones Thinks Inside the Box
- Traditional Media's Murky Ad Forecast
- McClatchy Leaves the Twin Cities Behind
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Fool contributor David Lee Smith does not own shares in any of the companies mentioned. He welcomes your comments or questions.