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Belo Fans Hold Breath

A strong quarter doesn't seem to be in the cards.
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Investors in Texas media conglomerate



could use some good news when the company reports first-quarter results Thursday morning.

Chances are, though, they aren't going to get much to hang their hats on.

The owner of the

Dallas Morning News

and regional TV and newspaper assets has seen its shares drop 12% this year. Shares hit a new 52-week low below $19 on Wednesday.

In mid-March the company warned that it was cutting first-quarter targets. Belo Chairman Robert Decherd said at the time that while revenue growth would be strong across all operating divisions, including TV, "the advertising market has been more challenging for Belo's newspapers than originally anticipated."

Analysts will be looking for the company to earn 15 cents on $371.5 million in revenue, compared with a 20-cent profit on sales of $347 million a year earlier.

Belo followers will be looking for the company to produce a little juice on the strength of Winter Olympics advertising at its local NBC stations. Belo has four NBC-affiliated stations in fairly large markets, including Seattle and Charlotte, N.C. Year-over-year comparisons, therefore, should be fairly easy to read, given that 2005 was a non-Olympic ad year. Its four ABC affiliates should also benefit from Super Bowl advertising.

But decent results at its TV stations division are likely to be offset by newspaper results, if the broader market is any indication. The company also owns

The Providence Journal

and a number of smaller papers.

Belo said in March that its newspaper group saw advertising revenue increase 5.2% in January from last year, but that it decreased slightly in February.

And apart from widespread softness in the newspaper ad market, Belo expects expenses to be high. "On the expense side, the first quarter will be the most difficult quarter of 2006 because it is affected by the recording of expenses related to the change in circulation distribution methods at

The Dallas Morning News

, the timing of various expenses versus last year, and expenses related to new products launched in the second half of 2005," the company said. Belo's results tomorrow will include $7 million in incremental circulation expenses at that paper.

It will also include almost $3 million in incremental stock-based compensation that Belo began expensing in January in accordance with new accounting rules.