DallasNews Stock Falls 19% Despite Q4 Earnings Rising Y/Y

Shares of DallasNews Corporation DALN have declined 19% since the company reported its earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 index’s 0.3% growth over the same time frame. Over the past month, the stock has declined 8.5% compared with the S&P 500’s 5.6% decrease.See the Zacks Earnings Calendar to stay ahead of market-making news.In the fourth quarter of 2024, DallasNews reported a net income of 74 cents per share against a net loss of 41 cents per share in the year-ago period. Total revenues declined 8.5% to $31.1 million from $34 million a year earlier, while the operating loss narrowed slightly to $1.8 million from $2.5 million. On a non-GAAP basis, the company incurred an adjusted operating loss of $1.3 million against an adjusted operating income of $0.6 million in the prior-year quarter. It reported a net income of $4 million, reversing a net loss of $2.2 million in the prior-year period. The improvement was driven by a $5.3 million non-cash tax benefit related to deferred tax assets.DallasNews Corporation Price, Consensus and EPS Surprise DallasNews Corporation price-consensus-eps-surprise-chart | DallasNews Corporation QuoteOther Key Business MetricsAdvertising and marketing services revenues declined 10.3% year over year in the fourth quarter to $11.5 million, driven by a 16.6% drop in print advertising. Circulation revenues fell 4.7% to $16.3 million, impacted by lower print subscriptions and the absence of one-time gains from Texas Rangers-related sales in 2023. Printing, distribution and other revenues dropped 19.4% to $3.2 million due to the termination of a commercial printing partnership and the lack of one-time product sales related to the Rangers’ championship run.On the cost side, total consolidated operating expenses were $32.8 million in the quarter, down 9.9% year over year. This improvement stemmed from $3.3 million in employee compensation and benefits savings, including severance and $0.5 million in lower newsprint costs. Adjusted operating expenses declined by a more modest 2.9% to $32.4 million.Management CommentaryExecutives emphasized the company’s progress on its transition to a smaller, more efficient printing facility, expected to generate $5 million in annualized savings beginning in the second quarter of 2025. CEO Grant Moise highlighted enhanced performance at Medium Giant, the company’s agency business, which improved its contribution by $1.2 million year over year. He also pointed to user experience improvements in digital platforms, including a 19% faster page load time and an upgraded app, which supported growth in digital subscriptions.President Katy Murray noted that the recent $43.5 million sale of the Plano printing facility would be used to eliminate pension liabilities and strengthen the balance sheet. As of January 2025, the pension plan was 94% funded, with plans to complete annuitization through a $14-$16 million contribution in the second quarter.Factors Influencing the Headline NumbersThe revenue decline was primarily due to the strategic discontinuation of the shared mail program and print-only editions of niche publications in August 2023. This decision accounted for $10.7 million of the $14.3 million full-year revenue drop. However, the corresponding reduction in costs — $9.1 million — mitigated the impact on profitability. Additionally, print circulation and advertising declines contributed to revenue headwinds, while digital-only subscription revenues rose 11.7% for the year.In the fourth quarter, digital subscriptions saw their strongest volume growth in two years, adding over 3,100 subscribers, which management attributed to a shift in pricing strategy. However, gains were partially offset by softness in classified advertising and the absence of one-off revenue from World Series-related sales.Full Year UpdateFor 2024, revenues fell 10.2% to $125.4 million. DallasNews posted a net income of $0.1 million against a net loss of $7.1 million in 2023, again largely due to a $5 million tax benefit. It reported a net income of 2 cents per share against a net loss of $1.33 per share in 2023.Other DevelopmentsThe most significant development during the quarter was the $43.5 million sale of the company’s Plano, TX, printing facility. Net proceeds are expected to be approximately $39 million after transaction costs and minimal taxes, with the majority earmarked to fully fund its pension obligations. Once complete, this move is expected to eliminate what management refers to as its “only debt,” providing greater financial flexibility. Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DallasNews Corporation (DALN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks