GM strike to damge third qtr. results
NEW YORK — Granite Broadcasting Corp.’s net profit before extraordinary items dipped slightly to $2.08 million in the second quarter, it said Monday, as development costs at its two Michigan stations took a bite out of earnings.
Granite warned that its third quarter would be hurt by the effects of the General Motors strike. While the strike ended last week, GM sharply cut its advertising budget in June and July.
In the three months to June 30, Granite’s revenue rose 6% to $43.7 million and operating cash flow — earnings before interest, taxes, depreciation and amortization — rose 4% to $19.4 million.
Granite said its station operating expenses rose 8% in the quarter due to increased spending on “news, programming, promotion and sales expense incurred primarily” at the company’s stations in Detroit and Lansing, Mich., “where we were doing some things to jumpstart the audience development” like a new news operation, Granite chairman Don Cornwell said.
Meanwhile, Cornwell said Granite’s WB station in San Francisco was doing particularly well, increasing revenue 20% in the second quarter.
Granite recorded an extraordinary loss of $4.2 million in the quarter due to early repayment of its bank debt and some bonds, prompted by a high-yield bond offering that allowed Granite to reduce its interest costs.