Posted on 01/31/2006 12:47:00 PM PST by abb
CHICAGO (MarketWatch) -- Knight Ridder said Tuesday that its fourth-quarter profit declined 22% from a year earlier on the absence of newspapers in Detroit and Tallahassee, Fla.
San Jose, Calif.-based Knight Ridder, the second-largest U.S. newspaper publisher said its net income was $83.3 million, or $1.24 a share, compared to $107.2 million, or $1.38 a share, in the same quarter last year.
Last year, Knight Ridder sold its interest in the Detroit Free Press to Gannett Co. and MediaNews Group. It also swapped the Tallahassee Democrat and an undisclosed cash amount in exchange for three Gannett papers, The (Boise) Idaho Statesman, The (Olympia, Wash.) Olympian and The Bellingham (Wash.) Herald.
Revenue rose 3.1% to $820 million from $795.5 million.
Analysts polled by Thomson First Call expect a profit of $1.22 a share on revenue of $817 million.
The company put itself on the block last fall after grumblings from two of its largest institutional shareholders, and a bidding process is underway.
During a conference call with analysts, Chairman Tony Ridder declined comment on the sale. "As you all understand, it takes time and we do not intend to talk about either the process or the participants while it is ongoing," he said.
Total advertising revenue rose 3% to $659.1 million, with circulation revenue up 2.3% to $135.8 million. Total costs were higher by 6.1%.
On a pro forma basis, as if Knight Ridder had owned The (Boise) Idaho Statesman, The (Olympia, Wash.) Olympian and The Bellingham (Wash.) Herald for at least a year, total ad revenue declined 0.2%, while circulation revenue slipped 1.2%. Total costs rose 1%.
"Despite flat revenue, we beat the Street's consensus by two cents and faced by far the stiffest advertising comparisons of the year," said Ridder, in a statement. "Knight Ridder Digital and our targeted publications both sustained their strong growth curves. Costs were down substantially from their third-quarter level and below the average for the year."
Ridder told analysts the company expects ad revenue to improve by a range of 3-4% in 2006 over 2005, with "more growth in the second half than the first."
The company's profit is expected to rise by a mid-to-high single digit percentage, Ridder said.
In an industry-wide trend, classified ad revenue rose 4.8%, reflecting ongoing strength in help-wanted and real estate ads. Help-wanted sales rose 21%, while real estate jumped 13.3%. Each category had its best performance of 2005.
Retail ad revenue fell 1.1% on declines in department store, home electronics and grocery store ads. National ad sales declined 6.8%.
Automotive classified ad revenue plunged 17%, the worst quarterly performance of the year in a category that has been a sore spot for all the newspaper publishers over the past several quarters.
As more readers turn to the Internet for news and information, newspaper publishers have been able to post significant online revenue gains. At Knight Ridder Digital, revenue jumped 55.4% to $45.5 million.
In December, total ad revenue rose 2%, with retail revenue down 0.2%, national revenue down 4.5% and classified revenue up 10.5%.
On a pro forma basis, December ad revenue fell 1.1%, with retail down 3.5%, national down 5% and classified revenue up 5.8%.
Tony Ridder said January ad revenue looks stronger than that of December.
Knight Ridder shares declined $1.19, or 2%, to $62.26 in afternoon trading.
David B. Wilkerson is a reporter for MarketWatch in Chicago
"More good news for today...."
You got that right, brother. Hope this means that their leftwing rag, the Akron Beacon Journal, will be gone soon.
"More good news for today...."
You got that right, brother. Hope this means that their leftwing rag, the Akron Beacon Journal, will be gone soon.
Propaganda masquerading as news -- it just don't sell
Boo hoo NOT
Isn't it funny how they denigrate Fox News while they go broke?
Good riddance.
As Judge Smails might say, "Well, Mr. Unemployed Journalist Guy, the world needs ditchdiggers too."
The WSJ's version of the story...
Knight Ridder's Net Falls 22%
By JOSEPH T. HALLINAN
Staff Reporter of THE WALL STREET JOURNAL
January 31, 2006 1:01 p.m.
Knight Ridder Inc., which put itself up for sale in November, reported that fourth-quarter net income fell 22% on flat revenue.
Profit for the quarter was $83.3 million, or $1.24 a share, down from $107.2 million, or $1.38 a share, a year earlier. Revenue rose 3.1% to $819.9 million.
Shares fell in afternoon trading, down $1.42, or 2.2%, at $62.03, on the New York Stock Exchange.
The company's results were muddied by newspaper swaps and sales earlier in the year. On Aug. 29 Knight Ridder acquired three newspapers in the western U.S. in exchange for a paper in Tallahassee, Fla., and cash. It also sold its Detroit newspaper operations to Gannett Co. Results for the three acquired papers are included in the fourth-quarter results.
For the year ended Dec. 25, Knight Ridder earned $471.4 million, $6.52 a share. That includes $2.87 a share from gains on the sale of Detroit and Tallahassee. In 2004, it earned $326.2 million, or $4.13 a share, including 35 cents a share from the reclassification of Detroit and Tallahassee as discontinued operations.
San Jose-based Knight Ridder is the nation's second-largest newspaper chain by circulation, with 32 daily papers, including the Philadelphia Inquirer and the Miami Herald. The company was forced to put itself up for sale last fall after its largest shareholder urged the company to evaluate its "strategic alternatives." The company said costs associated with this evaluation amounted to four cents per diluted share in the quarter.
In a statement, company Chairman and CEO Tony Ridder said the company's online ventures were growing, with revenue at Knight Ridder Digital up 55.4% for the quarter, to $45.5 million.
But its print products haven't done so well. Big markets continued to fare worse than smaller ones. Total ad revenue in Knight Ridder's top nine markets, including Philadelphia and Kansas City, fell 1.6% for the quarter; the mid-sized and smaller markets were up 2.3%. For the year, the company said, ad revenue in large markets inched up only 0.4%; in small and mid-size markets, it rose 4.3%.
Circulation continued to decline in the fourth quarter, down 4.1% daily and 4.3% Sunday. The company said price increases in some markets contributed to the decline. For the full year, circulation declined 3.1% daily and 3.3% Sunday. The company's results were boosted by a share repurchase. During the quarter Knight Ridder bought back 857,000 of its shares. Total repurchases for the year were 10.4 million, bringing total shares outstanding at the end of the year to 66.9 million.
Write to Joseph T. Hallinan at joseph.hallinan@wsj.com
A 10% profit doesn't look bad.
I hate what Knight-Ridder did to the Biloxi Sun Herald when they bought it...
I've emailed DIRECTV and the FCC in support of the 'A La Carte' cable/satellite subscription concept. I don't think I should be forced to pay for cable channels I don't watch. I don't wish to subsidize CNN, MTV, etc. any more. I believe this is a good way to defund the MSM.
Link to FCC 'A La Carte' comment form:
http://gullfoss2.fcc.gov/ecfs/Upload?hot_docket=1009000877%7C04-207%7CCable+and+Satellite+subscriber+options%2C+e.g.+a+la+carte+channels&Send=Continue
....The company's results were muddied by newspaper swaps and sales earlier in the year....
To me this is the key and the rest is misleading. To say profits are down comparatively with the same quarter and not go deeper is bad reporting. One would expect revenues and resultin profits to decline is major pieces of the business are sold. The question is how is the return on capital now? up or down?
Good.
Hence, the image of dinosaurs bogged down in a tar pit.
Great news!
Does the 'excerpt and link only' list need to be updated to reflect that the Tallahassee Democrat is now Gannett (the Detroit paper seems to already be on the Gannett list) and that the the (Boise) Idaho Statesman, the (Olympia, Wash.) Olympian and the Bellingham (Wash.) Herald are not, or do you need to wait until you get something 'official' from the companies?
Thanks for that link.
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