Execs Optimistic About 2nd Half

By: Newspaper publishers issued guardedly optimistic forecasts for the second half of the year at an investor conference Wednesday, but cautioned that trends remain hard to predict.

Several of the publishers at the meeting, which was sponsored by the Newspaper Association of America, an industry group, reported strong results in help-wanted and real estate classified ads, often outweighing weakness in auto ads.

National advertising remained uneven, with some publishers hopeful that a fuller slate of movies in the second half could boost entertainment advertising. But the consolidation of and weaknesses of major retailers remained a point of worry.

Executives from Dow Jones & Co., whose Wall Street Journal has been badly hit by a prolonged downturn in business-to-business advertising, held out hope for a mild recovery in technology and financial advertising, the Journal's two key ad categories.

Karen Elliot House, publisher of the Journal, said Dow Jones was "cautiously optimistic" that technology advertising would rise "modestly" in the second half of 2005.

Richard Zannino, the chief operating officer, said the same held true for financial advertising, though he warned that the business advertising market remains "brutally difficult."

Gannett Co., the largest publisher in the country, said it was hopeful for a better economic picture in the second half, but was also cautious. The company said its second-quarter earnings would be slightly below analysts' estimates.

The McClatchy Co., publisher of the Minneapolis Star Tribune and The Sacramento Bee, backed its estimates for second-quarter earnings and said it expects second-half advertising revenues to grow in the mid-single digit percentage range.

McClatchy CEO Gary Pruitt downplayed the pessimism with which a number of investors currently view the newspaper industry, saying that its declines in reach are not nearly as bad as those suffered by television.

Asked how he planned to allocate the company's cash, he quipped that every time he comes to an investor conference such as this one, he prepares himself for two questions: "One, is your business dead, and two, how do you plan to use all your cash?"

Donald Graham, chief executive of The Washington Post Co., repeated his well-known position of declining to make forecasts for short-term quarterly profits, and discouraged investors from doing the same.

"We spend almost no time forecasting our own business in terms of quarters, therefore we pay no attention to anyone else's forecasts," Graham said. Graham said the company remains focused on building value "over the very long run."

Two publishers that have been hit by reprimands for circulation misstatements, Belo Corp. and Tribune Co., both reported making progress on that issue.

Dennis FitzSimons, Tribune's chief executive, said the company expects settlements with advertisers at Newsday over circulation misstatements to be essentially finished by the end of the month. He also said the charges made against several Newsday executives who were arrested last week mirrored the conclusions of an internal investigation.

Robert Decherd, the CEO of Belo, said that resolving the circulation issues at the Dallas Morning News was the company's "highest priority." He said the company was putting in place "fundamental, systemwide changes" in its circulation practices.