By: Lisa Singhania, AP Business Writer
(AP) The Washington Post Co. and Gannett Co. Inc. expressed optimism Thursday that business is improving but cautioned that the strength and pace of the economic recovery remains questionable and declined to make any bold predictions for 2003.
On the last day of the annual Credit Suisse First Boston Media Week Conference, the Post Co. offered no specific financial targets for the current quarter or 2003 and said it was focused on the long term.
“We don’t care in the least what we will make next quarter, or any quarter, and will expend no effort at influencing quarterly results,” said Chairman and Chief Executive Donald Graham. “We do not think short-term financial results are important. We pay no attention to analysts’ expectations.”
The company owns The Washington Post, Newsweek magazine, other publications, a cable company, and a Web site, but Graham said the Kaplan education business is growing so rapidly that it could become the top revenue producer as early as next year.
Kaplan, which provides education and career preparation services, is expected to have more than $600 million in revenue this year, compared with $75 million a decade ago, Graham said.
Results at the company’s flagship paper, The Washington Post, continue to show the effects of the advertising turndown, with ad revenues through November off 4% from the previous year.
However, Graham said most of that decline is in help-wanted advertising. “Excluding the recruitment categories, revenues actually are up 1.3%,” he said. “The Post is certainly closer to the bottom than to the top of the advertising cycle. And … its economic performance will improve if the advertising climate does.”
The profit picture was more positive at the company’s TV stations, which reported a gain of almost 11% in year-to-date revenues through November. Much of that was political advertising.
Gannett, which publishes USA Today and other media properties, expects fourth-quarter earnings per share in the $1.26-$1.28 range, roughly in line with analysts’ estimates, but said the outlook for 2003 remains uncertain.
“We expect the economy to continue to grow next year barring external factors. But, as we’ve said before, we believe the recovery will be uneven,” said Chairman, President, and CEO Douglas H. McCorkindale. “If the economy is stronger than we anticipate, then our earnings will be better than planned.”
In its newspaper division, excluding USA Today, the company said it expects advertising revenues to increase by mid-single digits, while circulation revenues should rise by low-single digits — reflecting newspaper price increases in some markets. Newsprint costs are expected to rise 10% at most. Staff reductions are expected to total low-single digits, although staff may be added in some areas, including sales.
USA Today is forecasting its advertising pages and circulation volume will increase by low-single digits.
TV revenues are expected to be down by low-single digits from 2002, which was boosted by political and Olympic advertising.
Gannett also said it plans to introduce more demographic and geographic-specific publications in 2003, such as weeklies launched this year in Idaho and Michigan that focus on young adults.
Also, Gracia Martore was named the chief financial officer, effective Jan. 1. The first woman to hold that position at Gannett, she replaces Larry Miller, who will remain executive vice president for operations. Martore, who became a senior vice president last year, will continue to handle the company’s investor relations.