Investing to Wealth

Belo Corp (NYSE: BLC)

Belo Corp. (BLC) is a pure-play television company. The Company has a diversified group of television broadcasting operations, including interactive media and cable news operations. The Company owns and operates 20 television stations reaching more than 14% of United States television households, including ABC, CBS, NBC, FOX, CW and MyNetwork TV (MNTV) affiliates and their associated Web sites in 15 markets across the United States. BLC manages one television station through a local marketing agreement (LMA). In addition it owns two local and two regional cable news channels and holds ownership interests in two other cable news channels. On February 8, 2008, the Company completed the spin-off of its former newspaper businesses and related assets, into a separate public company, A. H. Belo Corporation (A. H. Belo).

The Company was founded in 1842 and is based in Dallas, Texas.

Source: https://trading.scottrade.com/quotesresearch/ScottradeResearch.aspx?symbol=BLC , http://www.belo.com/invest/ , http://www.reuters.com/finance/stocks/incomeStatement?stmtType=INC&perType=INT&symbol=BLC.N ,

Financial Summary

Non-political advertising revenues decreased $45,536, or 26.6%, in the three months ended June 30, 2009, compared to the three months ended June 30, 2008. This decrease is primarily due to a $44,845, or 27.9%, decrease in local and national spot revenue. Spot revenue decreased in most categories but primarily in the automotive, retail, entertainment, consumer services, home construction and improvement, healthcare, restaurant and financial services categories. Internet advertising revenues decreased $380, or 5.1%. Political advertising revenues decreased $1,767 in the second quarter 2009 as compared with the second quarter 2008. Political revenues are generally higher in even-numbered years than in odd-numbered years due to elections for various state and national offices. Other revenues increased primarily due to increases in retransmission revenues.

For the three months ended June 30, 2009, station salaries, wages and employee benefits decreased $11,643, or 20.4%, primarily due to decreases in salary expense of $5,167, vacation expense of $2,963 (due to an announced change to the Company’s vacation policy), 401(k) Plan expense of $1,869, sales commissions of $1,085, pension transition supplement expense of $860 and bonus expense of $780. These decreases were partially offset by an increase in medical insurance costs of $1,006. Station programming and other operating costs decreased $935, or 1.9%, with decreases in most expense categories, including a $3,029 decrease in advertising expense and a $928 decrease in national representation fees. In 2005, the Federal Communications Commission (FCC) allowed a major wireless provider to finance the replacement of analog newsgathering equipment with digital equipment. The Company recognized credits for this replacement of $765 in the second quarter 2009 and $4,733 in the second quarter 2008, as one Belo market converted to this digital equipment in the second quarter 2009 versus five Belo markets in the second quarter 2008. Corporate operating costs decreased $1,419, or 21.4 percent, in the second quarter 2009, primarily due to an insurance reimbursement.

Net cash provided by operations was $19,359 in the first six months of 2009 and $22,953 in the first six months of 2008. The 2009 operating cash flows were primarily provided by net earnings adjusted for non-cash charges and a decrease in accounts receivable, partially offset by cash used for routine changes in other working capital items. The 2008 operating cash flows consisted of $35,706 provided by continuing operations and $12,753 used for discontinued operations. The 2008 operating cash flows were primarily provided by net earnings adjusted for noncash charges and a decrease in accounts receivable, partially offset by cash used for the payment of costs related to the spin-off of A. H. Belo Corporation and supplemental retirement costs.

Net cash flows provided by investing activities were $2,583 in the first six months of 2009 compared to $17,289 in net cash flows used in investing activities in the first six months of 2008. The 2008 investing cash flows consisted of $16,985 used for continuing operations investing activities and $304 used for discontinued operations investing activities. The change from 2008 cash flows is primarily attributable to lower capital expenditures and divestiture of a joint venture interest in the first six months of 2009.

At June 30, 2009, the Company’s leverage ratio was 5.3 and its interest coverage ratio was 3.0, both of which are in compliance with debt covenant requirements under the 2009 Credit Agreement. If advertising revenue comparisons to the prior year continue near current levels, the Company’s leverage ratio can be expected to increase and could potentially exceed the maximum ratio allowed in 2009. Management has held preliminary discussions with the Company’s lead banks and believes that the Company could obtain covenant relief prior to any such event. The Company expects its leverage ratio to decrease in 2010 from 2009 levels.

At June 30, 2009, BLC had $615,406 in fixed-rate debt securities as follows: $175,406 of 6-3/4% Senior Notes due 2013, $200,000 of 7-3/4% Senior Debentures due 2027; and $240,000 of 7-1/4% Senior Debentures due 2027. The weighted average effective interest rate for the fixed-rate debt instruments is 7.3%.

Source: http://www.belo.com/invest/

Analyst Consensus

This is the consensus forecast amongst 2 polled investment analysts. Against the Belo Corp company.

The one analyst offering a 12-month price target expects BLC share price to rise to 6.00 in the next year from the last price of 4.86.

Source: Financial Times.com

Source: http://www.reuters.com/finance/stocks/estimates?symbol=BLC.N

Investment Highlights

BLC recently announced that Dunia A. Shive, president and CEO of BLC, has been named to the board of directors of The Associated Press. She will fill an appointed position and serve a three-year term. Shive has served as president and CEO of BLC since February 2008, previously serving as president and chief operating officer of the Company from November 2007 to February 2008; from February 2006 through November 2007, Shive was the president/Media Operations with oversight of all of BLC’s television, cable news and interactive media operations and two of the Company’s three major newspapers. From January 2005 through January 2006, Shive served as executive vice president of BLC, and from January 2004 through December 2004 as executive vice president/Media Operations. She previously was executive vice president/CFO of the Company, and has been a member of BLC’s Management Committee since June 1998.

BLC is scheduled to issue a news release regarding its third quarter 2009 earnings on Tuesday, November 3, 2009, at 7:30 a.m. CST. A conference call to discuss the earnings release and other matters of interest to shareholders and analysts will follow at 1:00 p.m. CST that afternoon.

BLC announced earlier this year that its board of directors has elected McHenry T. Tichenor, Jr. as a Class III director of the Company effective August 3, 2009. Tichenor’s term will expire at BLC’s Annual Meeting of Shareholders in May 2010, when he will be eligible for re-election by shareholders. Tichenor, 54, served as executive vice president and president/Radio Division of Univision Communications Inc. from 2003 to 2005 and also served on the Company’s board of directors from 2003 to 2007. From 1997 to 2003, Tichenor was chairman, president and CEO of the Hispanic Broadcasting Corporation prior to its merger with Univision Communications in 2003. From 1981 until 1997, Tichenor was president, CEO and director of Tichenor Media System Inc., which merged with the Hispanic Broadcasting Corporation in 1997.

Source: Scottrade.com, Reuters.com, belo.com

Technical Analysis

Moving Average Price Compare

BLC is trading above its 50-day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

Bollinger Bands

BLC is trading near its lower Bollinger Band. This suggests that the stock price is low relative to its recent price action.

MACD

BLC’s MACD is indicating a weak bearish signal. Although the indicator is above the critical level of 0, which implies that the underlying moving averages are bullish, the MACD has crossed below its 9-day moving average or signal line. This suggests that positive momentum has begun to slow.

Comparative Analysis

Source: Reuter.com, Nasdaq.com

Insider Trading Activity

Net Share Purchase Activity

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