Benchmark Comments On Belo Corp Following Solid Earnings

Belo Corp. BLC reported 1Q11 total revenue of $151 million, down 2% y/y, matching consensus but slightly below Benchmark's $154 million estimate. Adjusted EBITDA fell by 14% y/y to $41 million, in line with Benchmark's estimate, driven by a lower than anticipated increase in costs. Adjusted EPS was $0.09, well ahead of consensus at a loss of $0.03 and $0.01 above Benchmark's $0.08 estimate. Benchmark's 2011 estimates on Belo remain essentially unchanged, with net revenue forecast to fall by 3% y/y to $671 million, including 3% y/y core spot growth. Benchmark maintains its forecast of a 4% increase in operating expenses, driving an adjusted EBITDA decline of 16% y/y to $209 million. Its EPS estimate is $0.62. In conjunction with 1Q11 EPS results, Belo announced it was lifting the suspension of its dividend, implemented in 2Q09, and instituting a $0.05 quarterly dividend beginning in 3Q11. Belo also paid off the $11 million remaining on its revolving credit facility, further shoring up its balance sheet. Total debt stands at $886 million, at 4x 2011E EBITDA. Benchmark has a $10 PT and Buy rating on Belo Belo closed Wednesday at $8.47