Journal Communications Profit Up, Despite Continued Newspaper Ad Weakness

By: Mark Fitzgerald Milwaukee-based Journal Communications Inc. reported Thursday that its fourth-quarter net profit, excluding special items and impairment charges, jumped 26.4% compared to a year ago to $23.8 million.

The broadcaster and publisher said its publishing revenue fell 16.4% in the quarter to $50.2 million "largely due to continued weakness in all advertising categories."

Publishing swung to an operating profit of $7.8 million compared to a loss of $13.9 million in the year-ago quarter. Newsprint expense plummeted 41.5% on reduced price and consumption, Journal Communications said.

At its flagship Milwaukee Journal Sentinel, revenue fell 15.7% to $42.2 million compared to $50 million in the fourth quarter of 2008.

Classified advertising revenue dropped 35.4% on decreases in the three major categories of employment, automotive and real estate advertising.

Retail advertising revenue at the daily declined 17.2%.

Interactive advertising revenue at the daily newspaper dropped 26.6% to $2.6 million compared to $3.6 million a year ago. Journal Communications said that was primarily due to a decline in the pricing model for automotive online classified advertising and an overall decline in employment online classified advertising."

Operating expenses at the Journal Sentinel reflected layoffs and other deep cost cutting, falling 27% excluding a special items.

Community newspapers and shoppers revenue for the fourth quarter was down 19.8% for the quarter to $8 million, mostly on continued declines in automotive and real estate retail and classified ads.

For the full year 2009, Journal Communications said, publishing revenue decreased 19.7% to $194.2 million.

Revenue at the Journal Sentinel for the full year fell 21.3% to $160.1 million compared to $203.4 million. Classified advertising revenue at the daily was down d48.8% for the year.

"In a year where revenue has been challenged, we closed 2009 with our strongest quarter," Chairman and CEO Steven J. Smith said. "We showed sequential improvements in revenue comparisons throughout the quarter, including an improving automotive category. This revenue performance, together with significant, and in many cases permanent reductions in our cost structure, resulted in increased operating margins and net earnings for the quarter."