Knight Ridder (KRI:NYSE - commentary - research - Cramer's Take) missed first-quarter estimates Monday in what the chairman of the newspaper chain called a "challenging" period.
The San Jose, Calif., company, which has agreed to sell itself to rival McClatchy (MNI:NYSE - commentary - research - Cramer's Take), said its continuing operations profit was just half of the year-ago level, as revenue rose 4% but costs surged 7%.
For the quarter ended March 26, Knight Ridder made $28.4 million, or 42 cents a share, down from the year-ago continuing operations profit of $57.1 million, or 76 cents a share. The latest quarter was hit by 6 cents a share in costs related to the company's decision to put itself on the block and 5 cents for stock-based compensation. Excluding those costs, the latest-quarter profit was 53 cents a share, 6 cents shy of the Thomson Financial analyst estimate.
Revenue rose to $740 million from $712 million a year ago. Advertising revenue rose 4.4% and circulation revenue rose 2.8%. Operating profit fell 16%.
"Results were particularly weak in Akron and Philadelphia, where ad revenue was down 10.8% and 5.5%, respectively," CEO Tony Ridder said. "The operating profit downturn at these two newspapers represented 37% of the downturn in GAAP operating profit and 53% of the downturn in adjusted pro forma operating profit.
"On the other hand, results were encouraging at a number of the newspapers, including good gains in the markets that have tended to be strong for some time -- overall ad revenue was up 8.6% in Contra Costa, 6.1% in San Jose, 4.6% in St. Paul, 4.1% in Miami and 3.8% in Fort Worth. In this respect, it is worth noting that the increase in advertising revenue for the 20 newspapers that The McClatchy Company intends to retain in its proposed acquisition of Knight Ridder, was 2.3% in the first quarter of 2006. Advertising revenue for the 12 newspapers that McClatchy intends to divest declined by 0.4%."
"The quarter was challenging,"
Reminds me of the little girl in the Donner party who wrote,"It was a rough winter."
aahhhhhhhhhhhh! 2 bad!
PITY PARTY NOT
Looks like they have decided to bash Rummy instead of Bush for a change. Looks like K-R is the only thing holding back the Dow!
Pray for W and Our Freedom Fighters
""The quarter was challenging," Tony Ridder, chief executive officer of Knight Ridder, said in a statement. "With total ad revenue up only 1 percent, and with the persistence of the soft revenue patterns across the industry for many months now (employment and real estate excepted), we continue to look to the second half for improvement.""
This has to be the Enronning/Arthur Andersen statement of the day: ""The quarter was challenging," Tony Ridder, chief executive officer of Knight Ridder, said.""