The combination of cost-cutting initiatives and a slight quarterly improvement in revenue led to a $27.4 million profit for Media General Inc. in the fourth quarter.
The company, which owns the Winston-Salem Journal and other media properties, reported yesterday that it had diluted earnings of $1.18 a share.
By comparison, the company had a loss of $85.5 million in the fourth quarter of 2008, which represented an earnings loss of $3.86 a share.
The average earnings forecast was 46 cents by analysts surveyed by Zacks Investment Research.
Media General's share price rose 59 cents yesterday to close at $8.90.
The company reported a 22 percent drop in operating expenses during the quarter to $144.6 million, primarily reflected in a 22 percent decline in employee compensation to $70.3 million. One of the cost-cutting initiatives was a five-day furlough program for employees in the quarter.
Media General reported having nearly 900 fewer employees at the end of 2009 than at the end of 2008. The company also had a 57 percent decrease in newsprint expenses as it benefited from lower prices and lower production use.
Although revenue from its publishing division was down 14 percent compared with the fourth quarter of 2008, it represented an improvement compared with an 18.5 percent decline in the third quarter of 2009. The main factors in the slight quarter-to-quarter improvement were increased revenues for circulation, printing and distribution operations.
Broadcast revenues declined 17 percent, which the company said "was entirely a reflection of lower political revenues."
Digital-media revenues increased 11 percent.
Marshall Morton, the president and chief executive of Media General, said that for 2010, the company expects to benefit from an improving economy and its lower cost structure. Revenue is projected to increase because of advertising for the Winter Olympics on its eight NBC television stations and a projected $42 million in political ads.
"For the full year, we expect our total revenues to increase in the mid-single digits," Morton said. "Total operating expenses are expected to increase in the mid-single digits, in part because we are not planning a furlough program in 2010."
Penny Abernathy, a professor at the UNC School of Journalism and Mass Communication with a focus on digital media, said that Media General has been effective to date in managing its costs.
"It also has more diversification than many of its media peers during a time of disruption and change in the media industry," Abernathy said.
rcraver@wsjournal.com
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