Morris Q2 Ad Revenue Drops 7.1%, Dragged Down By Florida Housing Bust

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By: Mark Fitzgerald

Hammered by a collapse in real estate and related advertising at its Florida newspapers, Morris Publishing said ad revenue for its second quarter ended June 30 fell $7 million, or 7.1%, to $92 million from 2006’s second quarter.

On a same-property basis, ad revenue was down 8.1%, said Augusta, Geo.-based Morris Publishing, the print unit of Morris Communications.

Classified ad revenue dropped 10.7% across the chain. Retail ad revenue declined 1.1% and national plunged 26.8%.

Overall print advertising fell 12.8%, while insert revenue was virtually flat, down 0.6%.

“The cyclical downturn in the Florida real estate market has adversely impacted not only the classified real estate category, but also many of our other advertising categories dependent on the housing industry,” Morris said in a filing with the Securities and Exchange Commission (SEC). “During the second quarter of 2007, our Florida daily newspapers, which account for approximately 33.0% of our total advertising revenue, contributed 99.9% of our net decline in total advertising revenue. We expect the downtown in our Florida markets to continue into the third quarter of this year.”

Morris publishes three Florida dailies, including The Florida Times-Union in Jacksonville. Ad revenue at the paper, its largest in Florida, fell $6.6 million, or 19.7%, for the quarter on “a steep decline in all of the print and insert categories,” Morris said.

Ad revenue for the Winter Haven (Fla.) News-Chief plunged 24.5% on weakness in retail and classified.

Elsewhere in the chain, Morris reported significant ad revenue declines at its George papers in Savannah, Geo., which was down 6.9%, and Athens, which was down 10.4%.

Morris said ad revenue at Bluffton Today, the free distribution daily that is closely watched by the newspaper industry, was up $0.2 million, or 20.5%, “with significant gains in the retail specialty publications produced and distributed by Bluffton, but not a part of the main newspaper.”

Online advertising revenue, which Morris includes with print results, was $9.8 million for the quarter, a jump of 22.6%. Morris attributed the increase to strength in the classified employment and retail advertising categories.

Online now represented 10.6% of total ad revenue during the quarter, up from 8.0% last year, Morris said.

Circulation revenue for the quarter fell 1.6% — with Jacksonville accounting for the entire decline, Morris said.

Net income for the second quarter of 2007 was $4.9 million, down $4.8 million from $9.7 million during the same period last year.

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