Earlier this morning AT&T reported Q4 2011 results. I’ve written about the wireless results a bit on Internet2Go. However I always look at the spreadsheet to see how the company’s local advertising solutions are doing.
The company’s directory revenues for Q4 appear to be $781 million, down from $926 million a year ago. Total revenue for the AT&T unit for 2011 was $3.3 billion (click to enlarge the charts below):
The earnings release also describes some sort of “directory asset impairment”:
Fourth-quarter 2011 net income attributable to AT&T totaled $(6.7) billion, or $(1.12) per diluted share. Excluding significant non-cash charges of $0.65 from the actuarial loss on benefit plans and $0.48 for directory asset impairments, along with a one-time charge of $0.44 for termination of the T-Mobile USA acquisition and a one-time gain of $0.03 from a tax settlement, adjusted earnings per share was $0.42 . . . The directory asset impairment resulted from an annual review of intangible assets compared to fair value.
I’m not an accountant so I don’t have any real insight into what this means.
One question: is this 15% revenue decline a reflection of a still-weak economy and uncertainty among SMBs or does it reflect a “secular” shift away from traditional directory publishing? Remember, however, that AT&T has lots of digital solutions as well.
Update: Apparently the “directory asset impairment” was some sort of write-down based on the declining value of the directory division. I didn’t listen to the earnings call but apparently AT&T CEO Randall Stephenson said the following:
That’s one area [the directory business] that we’re going to obviously take a very hard look at, and while I don’t want to give any indication on M&A activity, it’s one of these areas that we’re going to have to decide, do we keep it, do we restructure it, as we move forward
January 26th, 2012 at 6:20 pm
Greg,
I would think that the economy has a lot to do with it, and while electronic continues to grow, it would be faster if the economy was humming along (remember in 1998-2000 how fast banners and Internet were growing?).
Think about it: when people were taking out home equity loans to refurbish their home, add a deck, or even buy a larger house (that some couldn’t afford) these publishers were still growing revenues as the shift moved from print to digital. With banks lending less, homeowners underwater, and the overall economy basically stagnant, those contractors aren’t getting the phone calls (from any media) that they received just five short years ago and that has impacted their ad spending.
Until the housing market resolves itself (and the banks as well), publishers will still have to deal with uneven economic times and try and capture more ad dollars from a dwindling client base.