Lee Closes Out With Smaller Q4 Profit, Loss for Year on Impairment Charge

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By: Mark Fitzgerald

Lee Enterprises Inc. ended its fiscal year with a reduced fourth-quarter profit on ad revenues that fell more than 12%.

For the year, the Davenport, Iowa-based community newspaper publisher swung to a loss per share of $15.23, compared with earnings of $1.77 a share in fiscal year 2007. The 2008 loss includes non-cash goodwill and other intangible assets impairment charges that so far have totaled $717.2 million after taxes.

Without the impairment charges, earnings for the year were 97 cents per share, compared to $1.66 in 2007, Lee said.

Lee warned it will likely take another impairment charge for the fiscal year. The amount of the charge will be included in its filing of results with the Securities and Exchange Commission on or before Dec. 12.

Pro forma total operating revenue from continuing operations fell 10.7% to $244.9 million in the fourth quarter.

Print and online advertising revenue was down 12.9% to $184.5 million.

Retail advertising declined just 5%, but Lee again took a big hit on classified, which fell 23.1%.

Inside the classified categories, including online, employment advertising revenue dropped 34.5%, automotive was off 18.8%, and real estate fell 30.6%.

Lee was also the latest newspaper company to report online ad revenue actually declined in the most recent quarter. It said same-property online ad revenue fell 15.7%.

Online retail was up 16%, but it couldn’t offset declines in help-wanted, which plunged 31.5%,

“Like many other businesses and media companies, Lee has been battered by the unprecedented economic turmoil,” Lee Chairman and CEO Mary Junck said in a statement.

She said downward trends “leveled off in October,” but noted that the company’s steps to protect itself included suspending its dividend and amending its bank credit agreement.

“Also, we expect to reduce 2009 operating expenses by 6% to 7%.,” Junck added.

For more details and an analysis of the Lee results, check out the Fitz & Jen blog.

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