Gannett, Knight Ridder Report Robust Q4s on Strong Ad Upticks

By: (AP) Gannett Co., the largest newspaper publisher in the country, and Knight Ridder Inc., another of the largest newspaper companies, today reported sizable increases in the fourth-quarter profits compared to the same period a year ago.

Gannett, based in McLean, Va., reported a 5.6% rise in profit on a surge in political advertising on its TV stations and steady gains in newspaper advertising.

Knight Ridder, based in San Jose, Calif., reported that its profit rose 8%, as advertising revenues recovered in the final months of the year.

Gannett, which publishes 101 daily newspaper in the United States, including USA Today, the largest-selling daily, earned $378.1 million in the last three months of 2004, up from $358 million in the comparable period a year ago.

Per-share earnings came in at $1.47, up from $1.31 and in line with analysts' estimates according to Thomson First Call.

Revenue rose 7.7 percent to $1.96 billion from $1.82 billion.

Douglas McCorkindale, Gannett's chief executive, said in a statement that the improved results came despite an "uneven advertising environment." He said the results were driven by high levels of political broadcast advertising. Local and classified advertising were also higher, as were results from the company's U.K. operations, which also benefited from the weakness of the dollar.

Overall newspaper revenues rose 6.4% in the fourth quarter, which included revenues from several acquired properties. Had the company owned the same properties in both periods, and also excluding the effect of the favorable exchange rate, newspaper advertising revenues would have increased 4.0% in the quarter.

However, ad revenues at Gannett's flagship national newspaper USA Today declined 5.3% in the fourth quarter on a 17% decline in paid ad pages. For the full year, USA Today's ad revenues rose 6.6 percent while paid pages fell 3.2 percent.

For the full year, Gannett earned $1.32 billion, or $4.92 a share, up from $1.21 billion, or $4.46 a share, in 2003. Revenues rose 10% to $7.38 billion from $6.71 billion.

Gannett shares fell 30 cents to $79.89 in early trading on the New York Stock Exchange. Its shares reached a 52-week low of $78.84 in December.

Knight Ridder, whose newspapers include the San Jose Mercury News and The Miami Herald, earned $107.2 million in the last three months of 2004, compared with $99 million in the comparable period a year ago.

On a per-share basis, earnings rose to $1.38 from $1.22 a year ago. Excluding a tax benefit, earnings per share were $1.29, in line with the estimates of analysts polled by Thomson First Call.

Revenues rose 3% to $819.4 million from $795.5 million a year ago.

Knight Ridder's chief executive Tony Ridder said in a statement that the company had a "good year" in 2004, "capped by a particularly strong fourth quarter." Advertising revenues rose 6.6 percent in November and 4.4 percent in December.

Ridder attributed the 13% increase in per-share earnings to better operational results but also to the tax gain and a 3 percent reduction in the amount of outstanding company shares.

The company's online business also turned in a strong quarter, with revenues rising 44% and profits more than doubling to $36 million compared with the same period a year ago.

Chief financial officer Steve Rossi said the 4.7 percent growth in fourth quarter advertising revenues was the company's best quarterly performance of the year. Circulation revenues fell 3.7 percent, reflecting discounting and circulation declines, he said.

For the full year, Knight Ridder earned $326.2 million, or $4.13 a share, up from $296.1 million, or $3.63 per share, in 2003. Full-year revenues rose 2.3% to $3.01 billion from $2.95 billion.

Knight Ridder shares fell 81 cents to $65.61 in morning trading on the New York Stock Exchange. Its shares are up from a 52-week low of $62.24 in August.


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