Ad revs up; future uncertain as global conflicts loom
NEW YORK — Two broadcasters, Belo Corp. and Hearst-Argyle Television, reported robust fourth-quarter and full-year ad revenue tempered by jitters that a war could disrupt the nascent advertising recovery.
Hearst-Argyle, which owns 24 stations, including 11 ABC and 10 NBC affiliates, saw quarterly profit jump to $37 million from $7.5 million and revenue rise 21% to $208 million. For the year, profit grew 20% and revenue 12%.
But the shares fell 8.6% to $22.69 as CEO David Barrett said ad spend has slowed in the current quarter. “Our outlook . . . is cautious,” he said, “due to the uncertain economic environment and unfolding global events.” He said advertisers have turned more “cautious” and “measured” in their near-term ad expenditures.
Wall Streeters have been fretting that the looming war with Iraq will kill advertising, as it did temporarily during and after in the Gulf War in 1991. On the bright side, they like companies like these two that are regarded as potential takeover targets if and when the Federal Communications Commission relaxes its cap on TV station ownership.
Belo, which owns 19 stations and four newspapers including the Dallas Morning News, swung to a $46 million profit in the last quarter from a $2.5 million loss the year before. Revenue rose 13% to $394 million. Company posted $131 million in profit and $1.43 billion in revenue for all of 2002.
Chairman-CEO Robert Decherd was more upbeat than his competitor, noting that momentum has carried into the current quarter and insisting the company is “well-positioned to capitalize on a continued advertising recovery.”
Belo shares firmed 1.44% to close at $21.10.