Cost cutting helps Media General record second-quarter profit
- July 23, 2009
Media General reported net income for the second quarter of $20.6 million, or 90 cents per share. That represented a major improvement over the same period last year, when it reported a net loss of $532.2 million after taking a non-cash, after-tax impairment charge of $532.1 million.
CEO Marshall N. Morton credited a 23 percent decrease in total operating costs year-over-year as a major reason for the company’s turnaround. Plus, the cuts helped offset a 20 percent decline in publishing revenues of $163.8 million. Cost-cutting actions have included reductions in force across the company, employee furloughs and suspension of the company’s matching contributions to 401 (k) plans.
“Media General has implemented many difficult but necessary expense reductions that strengthen our ability to weather the deep recession and recognize the reduced revenue streams available in our business. As a result, we are in a stronger position to take advantage of an economic recovery,” Morton said in a statement. He noted that declines in advertising are abating somewhat in the automotive and retail categories.
Media General is the owner of Virginia Business magazine. Its many other media properties include the Richmond Times-Dispatch, 20 other daily newspapers and 18 television stations and associated Web sites, primarily in the Southeast.
Morton said that the company continues to expand into new digital and mobile platforms such as Internet partnerships with Yahoo and Zillow. On July 1, Media General shifted to a new operating structure based on geographic markets. “The realignment opens new opportunities to put customer needs in the forefront and then provide the best solution to meet those needs, without allegiance to a particular media platform,” he said.
Beginning with the third quarter, the company will report financial results based on five geographic markets and a sixth segment that includes the company’s interactive advertising services and other operations.