Cost cutting helps Media General deliver 4Q profit despite drop in revenue

Media General posts 4Q profit on cost cutting

RICHMOND, Va. — Newspaper publisher and TV station owner Media General Inc. said Thursday that cost cutting helped it turn a profit for the fourth quarter despite falling ad revenue.

The company’s shares were up 66 cents, or 7.9 percent, to $8.97 in afternoon trading.

Media General, which publishes the Richmond Times-Dispatch and The Tampa Tribune, said it earned $27.4 million, or $1.18 per share, in the three months ended Dec. 27. That reverses a loss of $85.5 million, or $3.86 per share, a year ago, when the company took a hefty one-time accounting charge.

The company’s revenue dropped 14 percent to $177 million.

Cost cutting, including layoffs and furloughs, helped lower operating costs by 22 percent. Media General ended the year with about 4,900 employees, 900 fewer than at the end of 2008.

The savings helped Media General slash its full-year losses from $631.9 million in 2008 to $35.8 million in 2009. Revenue for the year fell 18 percent to $657.6 million.

The company no longer breaks out specific advertising revenue figures, but said ad sales strengthened during the quarter. Media General CEO Marshall N. Morton said ad sales in December were “essentially even” with the same month of 2008.

That matches recent statements from other publishers. A modestly improving economy and easing comparisons to ad revenue from last year have softened the declines. McClatchy Co., which owns The Miami Herald, and 29 other dailies, said this week that its advertising declines shrunk as the quarter went on, from a 25.9 percent drop in October to 14.9 percent in December.

Looking ahead, Media General expects a brighter 2010. The company predicts $42 million in revenue tied to the 2010 midterm elections, political spending that was nearly absent in 2009. And its eight NBC affiliates will benefit from Winter Olympics advertising.

Overall, Media General predicts its revenue will climb on a percentage basis in the mid-single digits this year.