By: Mark Fitzgerald
Lee Enterprises Inc. reported a profit for its third fiscal quarter ended June 27 on ad revenue that remained stubbornly on the decline even as it improved from the year-ago quarter.
And for the first time since 2007, Lee reported a year-over-year increase in help-wanted classified ad revenue. All other classified categories were down compared to the year-ago period, but only real estate had a double-digit percentage decline.
Lee drew attention in its earning release to a 24.8% increase in stand-alone digital advertising sales. Digital ad revenue was $12.9 million, representing 9.2% of total advertising revenue.
“Although total revenue remains negative year over year, the rate of decline has slowed by nearly half as our digital sales initiatives gain steam rapidly,” Lee Chairman and CEO Mary Junck said in a statement. “For example, in May we began rolling out interactive video advertising, and already our enterprises have reported advertiser commitments totaling more than $1 million.”
Lee reported Q3 earnings per diluted common share of 22 cents, compared with a loss of 55 cents a year ago. Excluding adjustments for unusual matters in both years, earnings per diluted common share more than doubled to 26 cents from 12 cents a year ago.
The parent company of the St. Louis Post-Dispatch and Quad-City Times reported operating revenue for the quarter totaled $196.4 million, a decline of 3.6%.
Combined print and digital advertising revenue decreased 4.9%, to $140.8 million, with retail advertising down 4.4%, national down 10.5% and classified down 4.7%.
Print and digital employment ad revenue increased 3.5%. In other categories, automotive fell 7.3%, and real estate continued to remain very weak, dropping 18.5% against weak comparables.
Circulation revenue declined 0.5%.
Lee continued to chip away at operating expenses, which decreased 5.7%, helped by a drop in newsprint and ink expense of 13.5%.
Operating cash flow margin increased to 23.6% from 21.9% a year ago.
Lee paid down $32 million in debt during the quarter, making a total of $66.3 million in debt reduction so far this year.