Dallas Newspaper Publisher Battered by Earnings, Update, Shares Rise 5%
November 2, 2016 by Douglas A. McIntyreToward the end of trading, shares are up 5% to $6.25
A.H. Belo Corp. (NYSE: AHC) only owns one large daily, the Dallas Morning News, unlike large chains Gannett Co. Inc. (NYSE: GCI) and Tronc Inc. (NASDAQ: TRNC), the stocks of which were recently punished for poor earnings and a busted M&A deal. Belo, nevertheless, was not immune from worry about the overall industry, and it offered disappointing earnings. Its shares are off by nearly 20% in the past month to $5.75 (the stock was down only slightly Wednesday after the Belo earnings announcement).
Belo revenue fell 3.2% in the third quarter to $64.8 million. The publisher lost $500,000 ($0.02 per share) in the period, better than a $4 million ($0.18) loss a year ago. On a non-GAAP basis, the numbers were not as good: income was $2.3 million, down 19.8% from the same period a year ago.
The Belo earnings were similar to those of other newspapers, although it owns a small operation, called DMV, that helped results. It is a “marketing solutions” company that offers direct mail, digital distribution, research and mobile services.
The math of the DMV contribution:
Revenue from advertising and marketing services, including print and digital revenues, was $38.3 million in the third quarter of 2016, a decrease of $0.9 million, or 2.2 percent, when compared to the $39.2 million reported in the third quarter of 2015. Within advertising and marketing services, total digital and marketing services revenue increased 18.7 percent to $14.0 million primarily due to organic growth associated with Speakeasy and DMV. DMV revenue increased $2.5 million, or 106.5 percent, compared to the prior year period
The other large line of revenue, circulation, dropped 3.2% to $19.6 million.
One reason A.H. Belo shares were higher earlier this year was likely a rumor that the company was a buyout candidate for Gannett. The rumor, in September, helped drive shares close to $8.
Unlike Tronc and Gannett, which trade near 52-week lows, Belo has traded closer to the middle of its range. Part of This probably is partly due to DMV, which has packed a large punch for earnings.
Take This Retirement Quiz To Get Matched With A Financial Advisor (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the
advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.