By: Lucia Moses

But Some Chains Are Still Bullish

Newspaper companies warned Wall Street analysts and investors
this week that continued weakness in ad revenue growth and higher
newsprint costs would impact earnings in the fourth quarter and
next year.

Media executives made their 2001 forecasts on Wednesday at the
Credit Suisse First Boston media conference in New York.

No. 2 U.S. newspaper publisher Knight Ridder said it would record
a one-time charge of $10 million to $15 million in the fourth
quarter as a result of a buyout it is offering to reduce its
workforce by 1.5% to 2% in 2001. The company expects the
reduction to save up to $15 million next year.

CEO Tony Ridder said the company would have an operating margin
of 20% this year and would aim to reach the mid-20s in the next
three years, despite rising newsprint costs.

Gannett Co. Inc., the largest U.S. newspaper company, said 2001
would be challenging because of higher newsprint costs and the
absence of Olympics, election, and millennium spending. The
company looks for newspaper ROP advertising to rise 2% to 3% and
payroll to be flat to down slightly next year.

Dow Jones & Co. Inc. said fourth-quarter earnings per share would
come in between 83 cents and 86 cents, below its earlier estimate
of 92 cents, but still 36% higher than last year. The company
said because of a sharp falloff in the initial public offering
market, ad linage at The Wall Street Journal was down 12%
in November and was expected to be down 20% in December on a per-

issue basis because of extraordinary comparisons with last year.

Tribune Co. said it expected to grow newspaper revenue 4% to 6%
on a pro forma basis next year. The company plans to
significantly improve profit margins at its newly acquired Los
Angeles Times and increase revenue through cross-selling
across its preexisting and newly acquired Times Mirror

The New York Times Co. said despite the challenging economic
environment, it expected to achieve its goal of 10% to 15%
earnings growth next year by growing its national edition, adding
new newspaper sections, and containing payroll and newsprint
costs, among other initiatives.

Washington Post Co. Chairman Donald Graham said the company
doesn’t make forecasts, in keeping with past practice, but noted
that if the economy slows, Washington has been relatively

The McClatchy Co. President and CEO Gary Pruitt said he didn’t
expect the economic slowdown to have a dramatic effect because
the company operates in fairly strong markets. McClatchy expected
ad revenue to grow 3% to 4% next year.

E.W. Scripps Co. said it would have a better-than-expected fourth
quarter because of additional political ad revenue, but broadcast
TV would face difficult comparisons next year. Excluding the
Denver market, Scripps said it expected newspaper ad revenue to
grow 5% next year.

Journal Register Co. said it was comfortable with the lower end
of fourth-quarter earnings estimates, which range from 31 cents
to 33 cents per share. For 2001, the company predicted a 3% to 4%
increase in ad revenue, with continued softness in retail.

Lucia Moses ( is an associate editor covering business for

Copyright 2000, Editor & Publisher.

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