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Earnings Roundup

Weak ad sales hurt newspapers

July 20, 2007|From Times Wire Services

Newspaper publishers including McClatchy Co. and Media General Inc. reported Thursday that second-quarter profit declined on slumping automotive and real estate advertising.

McClatchy, publisher of the Sacramento Bee, said net income fell 9.5% to $39.9 million, or 49 cents a share, from $44.1 million, or 94 cents, a year earlier. Profit slid 75% at Media General.

The slumping U.S. housing market is crimping real estate advertising, especially in the Southwest and Southeast. Sacramento-based McClatchy's 11% drop in June ad sales was paced by declines in California and Florida.

U.S. newspapers suffered a 4.7% drop in first-quarter ad sales, according to TNS Media Intelligence, a New York-based researcher.

"The air has come out of the home bubble and it's taking a lot of advertising along with it," said Ed Atorino, an analyst at Benchmark Co. in New York. "There may be some months before we see recovery in those markets." He has a "hold" rating on McClatchy and Media General.

McClatchy's profit excluding a one-time gain was 48 cents, beating the 43-cent average estimate of seven analysts surveyed by Bloomberg News.

Sales more than doubled to $580 million after the purchase of Knight Ridder Inc. for $4.1 billion last year, the company said.

Nearly three-quarters of McClatchy's advertising declines are coming from California and Florida, Chief Executive Gary Pruitt said. Ad sales in those areas fell 18%.

Media General, based in Richmond, Va., said second- quarter net income decreased to $5.1 million, or 22 cents a share, from $20.2 million, or 85 cents, a year earlier. Earnings were in line with a forecast that Media General gave last month.

Sales rose 4.8% to $241.2 million after the company acquired four NBC television stations in June 2006.

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Reliance Steel's profit jumps 22%

Reliance Steel & Aluminum Co., a U.S. metals distributor based in Los Angeles, said second-quarter profit rose 22% to a record as acquisitions boosted sales.

Net income climbed to $122.8 million, or $1.59 a share, from $100.5 million, or $1.32, a year earlier.

Sales increased 22% to $1.9 billion from $1.56 billion.

Reliance, which processes and distributes at least 90,000 metal products, has made more than 35 acquisitions since went public in 1994.

Per-share profit was in line with the $1.57 average estimate of seven analysts surveyed by Bloomberg News.

The company also forecast that third-quarter profit would be $1.30 to $1.35 a share.

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Seagate gets lift from tax gain

Seagate Technology, the world's leading provider of hard drives used in computers and other electronics, said fiscal fourth-quarter profit rose sharply, helped by a tax gain and strong sales despite a tough pricing environment.

The Scotts Valley, Calif.-based company posted earnings of $541 million, or 96 cents a share, for the quarter ended June 29. The net income included a $359-million favorable tax adjustment, Seagate said. In the year-earlier quarter, the company earned $7 million, or 1 cent a share.

Revenue grew 8.5% from the year-earlier period to $2.74 billion.

Analysts, on average, expected a profit of 36 cents a share on sales of $2.69 billion.

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Capital One earnings up 36%

Capital One Financial Corp. reported a 36% rise in second-quarter earnings, citing revenue growth for the quarter's stellar performance.

The McLean, Va.-based company, a credit card issuer that is expanding into retail banking, also provided a revised full-year earnings forecast of $7 to $7.40 a share.

Net income totaled $750.4 million, or $1.89 a share, in the April-June period, up from $552.6 million, or $1.78, in the year-earlier quarter.

Revenue grew to $3.57 billion from $2.91 billion last year.

Analysts expected Capital One to earn $1.62 a share on revenue of $4.07 billion, according to a poll by Thomson Financial.

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