Belo Hopes to Build on Pockets of Strength

Updated from 11:13 a.m. EDT

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Media company Belo (BLC) posted second-quarter earnings that were ahead of its own internal targets and Wall Street's consensus estimate, but the company's outlook left some analysts wishing for firmer guidance.

Belo's profit came in lower than last year, as expected, but the Dallas-based company said it sees "a glimmer of optimism" as the third quarter continues, citing recent stock market gains and ongoing product introductions by advertisers.

The company, which owns The Dallas Morning News and The Providence Journal, among its newspapers and television stations, earned $39.4 million, or 34 cents a share, in the second quarter, down from $40.5 million, or 36 cents a share, in the year-ago period.

Analysts were expecting the company to earn 33 cents a share. Last year's results included a credit of 2 cents a share.

Mixed Advertising Outlook

On a conference call with analysts, Belo Chairman and CEO Robert W. Decherd said executives are "feeling better than we did a month ago [and] doing a little better than we thought we would. This all feels like a very slow, uneven recovery."

For the third quarter, Belo's Chief Financial Officer Dunia A. Shive said it's hard to forecast revenue for the company's television segment beyond the current month, because national advertisers are being cautious about their spending. But in a written statement she said "local spot pacings are beginning to solidify within the month."

Belo forecast third-quarter political revenue of about $2 million, compared with $11.5 million last year. July pacings for local and national revenue are up in the mid-single digits, excluding political ad revenue. Including political ad revenue, July spot revenue should be up about 1%. August pacings for spot revenue, excluding political ads, are up slightly. Including political ad revenue, Belo predicted that August spot revenue will decline in the low-to-mid single digits.