MILWAUKEE (AP) — Journal Communications Inc. said Thursday its profits rose 24 percent in the last quarter, as the media company's broadcasting segment benefited from heavy spending on political advertising
The Milwaukee-based publisher of the Milwaukee Journal Sentinel, Wisconsin's largest newspaper, reported net earnings of $7.6 million, or 13 cents per share. That's up from earnings of $6.1 million, or 10 cents per share, in the second quarter of last year.
Steven Smith, the company's chairman and CEO, attributed the "strong second quarter" to an increase in political ads and to "a continuing recovery in many of our local broadcast markets."
The company also owns 35 radio stations and 14 television stations in 12 states.
Journal Communications' broadcasting revenue soared 18 percent to $54.5 million, an increase of $8.4 million. The company was apparently one beneficiary of a historic recall season, in which Wisconsin's governor, lieutenant governor and 13 state senators faced recalls in the last year.
The Wisconsin Democracy Campaign, which describes itself as a nonpartisan watchdog group, said spending on the 15 recall races totaled $137 million. That includes $81 million spent on the June 5 recall, which involved Gov. Scott Walker, Lt. Gov. Rebecca Kleefisch and four Republican state senators.
Political advertising revenue accounted for $5.7 million of broadcast revenue, a six-fold increase from the $900,000 spent in the same quarter last year.
Even without that advertising revenue, Journal Communication's broadcast segment benefited from a 23 percent increase in national advertising, primarily due to an increase in automotive ads.
But the company has been unable to shake the prolonged advertising drought that's long affected newspapers across the country. The company reported that its publishing revenue fell 7 percent to $41.1 million, due to a continued slump in classified, national and retail advertising.
Overall revenue rose 6 percent to $95.5 million.
Journal Communications predicted that broadcast revenue next quarter would grow by at least 10 percent, driven by an improving economy, more revenue from political advertising and Olympic revenue at its NBC-affiliated television stations.
"While we expect to continue to actively pursue growth opportunities in broadcast, we also expect to use our cash to pay debt and repurchase shares," Smith said in a statement.
The company also warned that publishing revenue was expected to decline in the third quarter, likely by a percentage in the mid-single digits compared to last year, but not counting revenue from Florida community newspaper operations that were sold in 2011.
Daniel Leben, an analyst with Robert W. Baird & Co., maintained his neutral rating for the company.
"While we continue to expect 2012 political advertising to provide a substantial boost, we remain on the sidelines given our concerns around the publishing segment," he wrote in an email to investors. However, he noted that the company's efforts to launch a digital subscription could be a "potential catalyst" for growth, if successful.
Company shares rose 31 cents, or 6.0 percent, to $5.55 in morning trading Thursday. Shares in the past year have traded as low as $2.69 in October and as high as $5.72 in March.
Journal Communications: http://www.journalcommunications.com
Dinesh Ramde can be reached at dramde(at)ap.org.