Journal Communications earnings down 24 percent
MILWAUKEE — Journal Communications Inc. said Tuesday its earnings fell 24 percent last quarter amid a continuing ad slump, and warned that publishing revenue was expected to drop further next quarter.
The Milwaukee-based company said its net income was $6.1 million for the second quarter, or 10 cents per share. That was down from $8.1 million, or 14 cents per share, in the same quarter last year.
The company said its publishing and broadcast revenue were down overall, but TV revenue was up 1.3 percent excluding political and issue advertising in both years.
Chief executive Steven Smith said Journal delivered "mixed results in this challenging operating environment."
Journal Communications publishes the Milwaukee Journal Sentinel, Wisconsin's largest paper. It also owns 33 radio stations and 13 TV stations in 12 states, along with several community newspapers and shoppers in Wisconsin and Florida.
Revenue was $90.1 million, down 4.5 percent from $94.3 million. Company executives noted that the most recent quarter marked the first time Journal derived more than half its revenues from its broadcast operations. That sector accounted for 51.1 percent of its second-quarter revenue in 2011, up from 49.8 percent last year.
"That's an important milestone and a percentage that we expect will continue to climb," executive vice president Andre Fernandez.
Executive vice president Betsy Brenner said one reason this year's numbers appeared on a downward trend is because they were being compared to figures from last year's second quarter, which she said was the strongest in 2010.
The company said its newspaper revenue fell 5.9 percent to $36.7 million, due to a drop in retail and real estate advertising.
Broadcasting revenue also was down, in part because spending on political and issue ads was down $1 million to $900,000. Local ads were down 0.9 percent and national ads fell 3.8 percent, which the company attributed in large part to fewer car ads.
Journal said in a news release it expects publishing revenues will be down next quarter compared to the year-ago quarter due to "continued challenges with publishing advertising revenue." However, excluding political and issue advertising in broadcast, it expected radio and TV revenues to rise slightly.
The company's operating earnings fell 17 percent to $11.5 million, but Brenner said the company saved money on employment costs. She noted that the total number of full-time employees is down 10 percent since about the beginning of the calendar year.
"We continue to be very diligent about the number of people we have working for us," she said.
Brenner also noted that the Journal Sentinel is seeing an increase in single-copy sales. Overall, daily circulation was up 2.6 percent, while Sunday circulation fell 1.6 percent. That translated into circulation revenue decreasing 2.4 percent to $12.2 million.
Journal shares rose 5 cents, or 1 percent, to $4.99 in midday trading Tuesday. Its shares have traded in a 52-week range of $3.58 to $6.18.
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