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Media General Expects To Beat Profit Forecast

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The Associated Press

Published: June 11, 2008

RICHMOND, Va. - Media General, parent company of The Tampa Tribune, said it expects to make less money from publishing but to beat analysts' earnings estimates overall.

Chief Financial Officer John Schauss said in a Deutsche Bank Media & Telecom Conference that the newspaper publisher and television-station operator expects second-quarter earnings from continuing operations of 6 cents to 10 cents per share, excluding about 14 cents per share in severance costs.

Analysts surveyed by Thomson Financial, who generally exclude one-time items, forecast earnings of 6 cents per share.

For the full year, Media General expects earnings from continuing operations of between $1.35 and $1.45 per share, also excluding the 14 cents of severance expense. Analysts forecast earnings of 94 cents per share.

Schauss said the forecast assumes no further deterioration in the U.S. economy or the economy in Florida, where Media General also owns WFLA, News Channel 8; and TBO.com, among other operations.

For the full year, newspaper revenue is expected to drop 8 percent to 10 percent, but broadcast revenue is expected to grow 6 percent to 8 percent, mostly because of political and Olympics advertising.

The company's interactive media division is also expected to swing to a profit of $3 million on revenue growth of about 40 percent.

Last month, Media General said job cuts that began in early 2007 will be realized by the third quarter and help reduce operating costs. The reductions will have cut its work force by 750 positions, or nearly 11 percent.

President and Chief Executive Officer Marshall N. Morton said the company expects to recover the severance expense by the end of the third quarter in salary savings.

He noted that the company is taking other steps to reduce expenses, such as deferring capital spending, consolidating printing sites, and centralizing some graphics production and advertising functions.

Morton expressed confidence that the company's financial results will improve.

"While we're spending smartly, we're also managing for growth," Morton said. "We're creating products that deliver on our legacy of quality and credibility, while giving the customer the opportunity to use the information his or her way."

Media General shares fell 35 cents to $13.55 on Tuesday. The stock has fallen from a 52-week high of $35.76 last June to a low of $12.96 in April.

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