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Papers Report Lower Earnings

April 14, 2006|From the Associated Press

Newspaper publishers McClatchy Co., Tribune Co. and New York Times Co. reported lower first-quarter results Thursday as sluggish advertising, higher newsprint prices and other costs took their toll.

Results for Sacramento-based McClatchy Co. came in well below analysts' expectations. Shares fell as low as $45.38 before closing down $1 at $47, the lowest closing price since 2002.

The shares had already been under pressure after the company's March 13 announcement that it would buy the much larger publisher Knight Ridder Inc.

McClatchy earned $27.7 million, or 59 cents a share, down 14% from $32.3 million, or 69 cents, a year earlier. Analysts polled by Thomson Financial had expected 67 cents a share.

McClatchy's revenue edged up 0.4% to $282 million, with advertising revenue up 1.4% and circulation revenue down 4.5%.

The first quarter is normally a seasonally weak period for newspaper companies, coming on the heels of the holiday shopping period, when retailers tend to bulk up on advertising.

Tribune Co.'s profit fell 28% on lower revenue, stock compensation costs and one-time charges. The results beat analysts' expectations but still reflected the difficulties facing newspapers, with revenue in that division down 1% and circulation down 3%. Tribune's newspapers include the Los Angeles Times, Newsday and the Chicago Tribune.

Net income fell to $100.7 million, or 33 cents a share, from $140.8 million, or 44 cents a share, a year earlier.

Excluding certain items, operating results were 38 cents a share -- 2 cents better than Thomson Financial estimates. Revenue edged down 1% to $1.3 billion.

Shares of Chicago-based Tribune rose 18 cents to $28.20. The stock has fallen more than 28% over the last year.

New York Times Co. came in a penny ahead of analysts' expectations. But there too advertising was uneven, with the company's New England business group, anchored by the Boston Globe, facing headwinds from a weaker economy there and consolidation of several major advertisers.

New York Times Co. shares dropped 17 cents to $25.05.

The New York-based company earned $35 million, or 24 cents a share, down from $111 million, or 76 cents, a year earlier, when it recorded a big gain from the sale of the New York Times headquarters building. Without that gain, earnings were 30 cents a share.

The most recent quarter also included a charge of 4 cents a share related to previously announced job cuts.

Sales were up 3.3% to $832 million.

New York Times Co. also said it would exit a partnership with Discovery Communications Inc., requiring the cable TV company to buy back the newspaper firm's 50% stake in the Discovery Times Channel.

Janet Robinson, New York Times Co.'s chief executive, told analysts in a conference call that the company had decided to focus on short-form programming for distribution on the Internet.

"Advertisers are really coveting that," she said.

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