Owners of TV Stations Upbeat Heading into 2010
Basch, Mark, The Florida Times Union
Byline: MARK BASCH
After nothing but gloom and doom from media companies the past couple of years, two companies that own Jacksonville television stations seemed a bit more upbeat at an annual media outlook conference in New York two weeks ago.
Gannett Co. Inc. executives told analysts that they expect fourth-quarter earnings to be at the high end of analysts' estimates, which ranged from 48 cents to 62 cents per share. The average forecast had been 52 cents, according to Thomson Financial.
"Management's presentation at Media Week was more upbeat than our expectations, indicating that the Street needs to catch up to the improving fundamental story," Noble Financial analyst Michael Kupinski wrote in a research note.
Dave Lougee, president of Gannett's broadcast division, said trends for the company's television stations are positive. The company's station portfolio includes Jacksonville NBC affiliate WTLV TV-12 and ABC affiliate WJXX TV-25.
"Gannett's political footprint is very strong and fundraising and spending are expected to be very heavy," Lougee told the conference, according to a company press release.
He also said "combining all of Gannett's assets with the strength of our 12 NBC stations, the winter Olympics in Vancouver will be a big opportunity for us."
The Benchmark Co. analyst Edward Atorino said in a note that the Olympics and the 2010 elections could add $75 million to $100 million in advertising revenue to Gannett's television stations.
Atorino raised his rating from "hold" to "buy" and raised his price target on Gannett's stock from $16 to $18, reflecting "what we view as a steadily improving outlook, a sound long-term management strategy and an attractive stock valuation."
Gannett's stock rose steadily in the week after its presentation, from about $10 before the conference to a high of $14.15 Dec. 14 after Atorino's upgrade.
The Washington Post Co., which owns local independent station WJXT TV-4, is also looking for big advertising spending on next year's elections.
"In Michigan, Florida and Texas, the three states in which we operate [television stations], there are major statewide elections scheduled for 2010. We have elections for governor in all three states and for senator in Texas and Florida," Washington Post CEO Donald Graham told the conference, according to a transcript posted on the company's Web site.
"Television stations are not in the same boat as daily newspapers and general audience magazines. They've remained profitable and they both offer one key item - local broadcast news - that is very valuable to both viewers and advertisers," Graham said.
His company is, of course, best known for publishing a daily newspaper (The Washington Post) and a general audience magazine (Newsweek). But Graham said the strength of the company's Kaplan Inc. education division has kept cash flow strong this year.
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