By: Mark Fitzgerald
Lee Enterprises Inc.. continued the string of bad newspaper earnings reports Thursday, announcing a plunge in ad revenue that included a 9.1% fall-off in online advertising.
Lee on Thursday reported earnings for its third fiscal quarter ended June 29 fell to 6 cents per share from 49 cents per share a year ago. Lee said the decline included a 19 cent-per-share decline due to its previously announced $709 million non-cash goodwill impairment charge.
Without the impairment charge and certain unusual items, earnings per share were 28 cents, compared with 49 cents for the year-ago quarter, Lee said.
Operating cash flow for the quarter plummeted 26% percent compared with a year ago to $53.8 million. Lee said its operating income, which includes equity in earnings of associated companies, depreciation and amortization, and non-cash charges for impairment of goodwill and other assets, dropped 61.3% to $21.0 million.
Total operating revenue from continuing operations for the quarter decreased 8.3% to $256.4 million.
Print advertising revenue fell 10.1% — and online ad revenue stopped growing, with Lee reporting a 9.1% decline.
Combined print and online ad revenue was down 10% to $195.5 million.
Print and online classified ad revenue, calculated on a same-property basis, fell 17.2% on big declines in employment (off 26.5%); automotive (off 12.2%); and real estate (off 24.2%).
Retail ad rfevenue fell 3.1% fo the quarter, Lee said.
National advertising revenue decreased 21.2%, and circulation revenue was down 2.7%.
Lee cut its operati8ng expenses by 2.3% to $202.1 million, with wages and compensation down 3%, and newsprint and ink declining 0.2%.
Lee reduced the number of full-time equivalent employees by 4.9% for the quarter.
Lee Chairman and CEO Mary Junck said she believes the advertising slump will reverse when the economy improves, and said even in the downturn Lee’s retail ad revenue was relatively stable.
“We continue to produce strong cash flow, allowing us to reduce net debt by $4.8 million during the quarter and also complete the planned liquidation of a $17.9 million unfunded retirement plan,” she said in a statement. “We believe our financial outlook remains solid.”
Junck said the company expects to reduce expenses by another 5% to 7% by the beginning of its new fiscal year in the fall.