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3 Media Companies Post 2nd-Quarter Profit Decrease

July 18, 2001|From Bloomberg News

Media companies Gannett Co., Knight Ridder Inc. and Media General Inc. reported earnings decreases for the second quarter because of declining advertising sales.

The newspaper publishing industry has been hurt by fewer national and help-wanted advertisements as companies pare spending amid a slowing U.S. economy.

Gannett, the largest U.S. newspaper publisher, said profit fell 12% to $233.5 million, or 88 cents a share, as ad sales slowed at USA Today and the company's 22 television stations.

Total sales rose 12% to $1.63 billion, lifted by the acquisition of Central Newspapers Inc. Revenue at Gannett's 22 television stations fell 13% to $178.7 million.

The Arlington, Va.-based company also said results were hurt by a 27% rise in newsprint costs.

San Jose-based Knight Ridder, the second-largest newspaper publisher, said profit tumbled 33% to $60.5 million, or 71 cents a share, as sales fell 8.4% to $738.4 million.

The results exclude a $78.5-million charge to pay for the elimination of 1,600 jobs at the company's 32 papers. The cuts, achieved mostly through voluntary buyouts and early retirements, came on the heels of Knight Ridder's elimination of 400 jobs earlier in the year.

Advertising revenue dropped 8.6% to $576.6 million on fewer national and help-wanted ads at its daily newspapers.

Media General, owner of television stations and newspapers, said profit declined 20% to $7.7 million, or 33 cents a share, on a 2.6% dip in revenue to $205.7 million.

The Richmond, Va., company also said third-quarter earnings will fall short of expectations of 15 cents, and it doesn't expect to meet 2001 profit estimates of $1.28 a share.

On the New York Stock Exchange, Gannett shares fell 73 cents to close at $67.10 and Knight Ridder fell 6 cents to close at $61.34.

Media General's Class A shares rose 82 cents to close at $48.50 on the American Stock Exchange. Media General announced that it has completed the preliminary steps for listing its stock on the NYSE.

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