Newspaper Publishers Report Mixed Earnings

By: The Associated Press

(AP) Newspaper publishers reported mixed second-quarter earnings Tuesday, as some saw early signs of an advertising recovery.

Gannett Co. Inc., publisher of USA Today and 99 other newspapers, said its results rose in part due to its British newspaper business, while Dow Jones & Co. Inc. reported lower earnings compared with last year when results were lifted by an asset sale.

The New York Times Co. had lower earnings but said it was seeing signs of an advertising recovery in June. Media General Inc., a regional newspaper publisher and television company based in Richmond, Va., had better-than-expected results but issued a cautious outlook.

Gannett Co.

Gannett, the largest newspaper publisher in the country, reported higher second quarter earnings despite a sluggish advertising environment, helped by strong performance in its British newspaper business.

McLean, Va.-based Gannett earned $324.3 million, or $1.20 per share, in the April-June period versus $303.9 million, or $1.13 per share, in the same period a year ago. The results were in line with the expectations of analysts surveyed by Thomson First Call.

Revenues rose 5.7% to $1.71 billion from $1.61 billion.

Douglas McCorkindale, Gannett’s CEO, said in a statement that the company’s newspaper operations, especially the Newsquest papers in the United Kingdom, contributed to the higher results.

Gannett’s total newspaper revenues, including USA Today and 99 other daily newspapers in the United States, as well as the Newsquest papers, rose 6% to $1.51 billion. At USA Today, the nation’s largest-selling daily, advertising revenues were even with last year despite a 1% slip in advertising pages to 1,220 compared with 1,236.

In addition to its newspaper business, Gannett also operates 22 television stations.

Gannett’s shares were down 7 cents to $76.73 in midday trading on the New York Stock Exchange.

For the first six months of the year, Gannett’s profit rose to $574.1 million, or $2.12 per share, versus $547.5 million, or $2.04 per share, a year ago. Six-month revenues rose 4.2% to $3.26 billion from $3.13 billion.

Dow Jones & Co.

Dow Jones, which publishes The Wall Street Journal and other financial publications, reported lower net earnings in the second quarter compared with results a year ago that were lifted by the sale of a community newspaper group.

The New York-based publisher earned $30.8 million, or 38 cents per share, compared with $54 million, or 64 cents per share, in the same period a year ago. The year-ago figures include a gain of 45 cents per share from the sale of the Essex County newspaper group.

Excluding that sale and other one-time items in both periods, including an investment gain, a restructuring charge, and an insurance settlement, earnings were 27 cents per share in the most recent period compared with 25 cents a year ago.

The latest results beat the 25 cents per share that analysts surveyed by Thomson First Call had been expecting.

Revenues slipped 5.6% to $393.6 million from $417 million a year ago. The company also reported that advertising linage at The Wall Street Journal declined 7.9% in the quarter compared with the same period a year ago.

Nonetheless, Peter Kann, CEO of Dow Jones, said that despite a difficult advertising and business climate, “we are beginning to see some indications of improvement.”

Dow Jones’s shares were up 32 cents to $43.27 on the NYSE.

For the first six months of the year, Dow Jones earned $97.8 million, or $1.19 per share, compared with $183.8 million, or $2.17 per share, in the same period a year ago. Revenues fell 7.2% to $751.8 million from $809.9 million.

In addition to the Journal, Dow Jones also publishes Dow Jones Newswires, Barron’s, the Far Eastern Economic Review, and several stock market indicators, including the Dow Jones industrial average.

The New York Times Co.

The New York Times Co. reported lower net income for the second quarter as the war in Iraq led to lower advertising revenues early in the three-month period. But the company said it was seeing improvement in June.

The Times posted net earnings of $72.8 million, or 47 cents per share, compared with $78.8 million, or 51 cents per share, in the same period a year ago. The results beat the forecasts of analysts surveyed by Thomson First Call by a penny a share.

Revenue rose to $801.9 million from $772.2 million a year ago.

Russell Lewis, the company’s CEO, said the Times’ results were “dampened” by advertising weakness from the war early in the quarter. But he said advertising results “improved considerably” toward the end of the period as newspaper ad revenues rose 4.6% in June.

The company’s shares were up 53 cents to $44.44 on the NYSE.

Six-month earnings were $141.7 million, or 92 cents per share, versus $133.2 million, or 86 cents per share, a year ago. First-half revenues were $1.59 billion, up from $1.51 billion a year ago.

Media General Inc.

Media General, a Richmond, Va.-based newspaper and television company, reported higher earnings in the second quarter, helped by unexpectedly strong newspaper advertising sales in June.

Media General earned $17.5 million, or 75 cents a share, in the quarter compared with $16.3 million, or 70 cents a share, in the same quarter last year. Wall Street analysts surveyed by Thomson First Call had been expecting 72 cents a share.

Revenue was $211.9 million, up from $211.8 million a year earlier.

The company’s performance in the second quarter was “somewhat better than our expectations, mostly due to a stronger than anticipated month of June for our publishing division,” chief executive J. Stewart Bryan III said in a statement.

“We believe that the second-quarter increase of 3% in publishing advertising revenues is an early sign of recovery,” Bryan said.

Bryan said the company does not expect to meet the current consensus forecast of 52 cents a share in profit for the third quarter. With an uncertain outlook for the company’s broadcast and newsprint divisions, he said, “we could be at the lower end” of the forecast range of 44 cents to 58 cents a share.

Media General’s shares were off 73 cents to $57.82 on the NYSE.

Media General owns newspapers, television stations, and online information services, mainly in the Southeast, and has a one-third interest in a newsprint manufacturer. Its newspapers include The Tampa (Fla.) Tribune, the Winston-Salem (N.C.) Journal, and the Richmond Times-Dispatch.

For the first six months of 2003, Media General posted earnings of $24.5 million, or $1.05 a share, compared with a loss of $4.48 a share in the same period a year earlier. The 2002 figure included a one-time charge of $126.3 million for a required change in accounting methods. Without that charge, the company would have reported a profit of $22.3 million, or 96 cents a share.

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