By: Lucia Moses
With April came blooming flowers and a bit of relief from the March chill in newspaper advertising revenue. But the fulfillment of wishes for a quick win in Iraq hasn’t unleashed showers of ad dollars, leading newspaper executives to keep wondering to what extent the Iraq war masked other problems in the economy.
During a conference call last week, Dennis FitzSimons, Tribune Co. CEO and president, said April’s newspaper ad revenue was better than March’s, thanks to Easter retail advertising. Revenue at the Tribune Publishing Co. grew 2% in the quarter and 1% in March. Goldman Sachs & Co. forecasts a 3% rise in overall newspaper ad revenue in April, following a 1% increase in March. But recessionlike conditions remain in place at some companies, helping explain why some improved their operating margins despite little revenue growth.
“Prospects for the second quarter and the year are unclear, given the war and its aftermath,” said Knight Ridder Chairman and CEO Tony Ridder. With ad revenue up only 0.3% in the quarter, the group continues to knock out costs where it can, including a cut of full-time equivalents by 3.4%. “Everywhere, we’re looking at FTEs,” said Ridder, adding that the company prepares to employ other cost controls that should yield savings in the “tens of millions of dollars.”
Media General Inc. dusted off some of the measures it put in place during the recession, including a hiring freeze, a deferral of capital expenditures, and a cutback in discretionary spending.
And Douglas H. McCorkindale, Gannett Co. Inc. chairman, CEO, and president, told investors during a conference call last week that business would be “still volatile” in the coming months.
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