(AP) Two major media companies reported higher earnings for the first quarter Tuesday as a decline in newsprint costs helped offset a slackening of advertising demand because of the war in Iraq.
The Washington Post Co. said profits for the January-March quarter climbed significantly from a year earlier, partly because of one-time items, including a gain on the sale of its half-interest in the International Herald Tribune to The New York Times Co. Meanwhile, Pulitzer Inc. reported a 3% rise in profits despite declining revenues.
The Washington Post Co.
For the three months ending March 30, the parent company of The Washington Post and Newsweek earned $73.1 million, or $7.59 per share. That compares to $11.6 million, or $1.16 per share, in the first-quarter of 2002. Revenues were up at all divisions except for broadcasting.
Excluding a gain of $32.3 million, or $3.38 a share from the International Herald Tribune sale, the company would have earned $4.21 a share, well ahead of analysts’ forecast of $3.77 a share, according to Thomson First Call.
Revenues rose 7% to $640 million, though advertising demand fell late in the quarter as the United States’ conflict with Iraq heated up and war began.
The Post saw a 21% revenue increase at its Kaplan educational service division. Revenue climbed to $177.8 million.
An 18% increase in advertising revenue at Newsweek helped the magazine publishing division post an overall 3% increase in first-quarter revenues, to $77.5 million.
At the company’s newspaper publishing division, which also includes more than two dozen Maryland community newspapers, revenue was $204 million, a 2% increase from a year ago. The Post cited higher ad revenue both in print and online, along with an 11% drop in what its flagship newspaper, The Washington Post, paid for newsprint. The paper’s circulation declined 1.9% for its daily editions and 1.1% on Sundays.
Revenues generated by online publishing, primarily washingtonpost.com, increased 27% to $9.5 million. Local and national online advertising revenues jumped 78% in the quarter (the figure doesn’t include classifieds). Revenue at the Jobs section of washingtonpost.com rose 17%.
Broadcasting proved to be a sore point, with revenue for that division down 6%, to $70.8 million. The company blamed several days of commercial-free Iraq war coverage, along with the loss of Olympics related ads that its NBC affiliates enjoyed in the first-quarter of 2002.
However, the Post’s cable division saw an 8% revenue increase, to $110.4 million, which it credits to continued growth in cable modem and digital service revenues.
Shares of Washington Post Co. gained $9.65, or 1.4%, to close Tuesday at $712 on the New York Stock Exchange.
Pulitzer reported net income of $7.1 million, or 33 cents per share, up from $6.8 million, or 32 cents per share in the same period a year ago. Pulitzer owns 14 daily newspapers, including the St. Louis Post-Dispatch.
The company’s performance was two cents short of the 35 cent increase forecast by analysts surveyed by Thomson First Call.
Operating revenue in the first quarter fell 1.8% to $98.2 million from $100 million in the previous year. However, the company said operating expenses also decreased due to lower distribution costs, decreased bad debt expense, and a decline in newsprint costs.
Robert C. Woodworth, Pulitzer’s president and chief executive, said revenue was affected by cautious advertising stimulated by war with Iraq, the March to April shift for Easter, as well as early advertising spending last year because of the St. Louis Rams Super Bowl appearance and the Winter Olympics.
Pulitzer stock closed at $47.10 a share on the NYSE, up $1.
Pulitzer owns the Post-Dispatch and the Arizona Daily Star in Tucson, along with 12 other daily newspapers, related new-media activities, and the Suburban Journals of Greater St. Louis, a group of 37 weekly papers and niche publications.