Knight Ridder Earns $56.5 Million

By: Lisa Singhania, AP Business Writer (AP) Knight Ridder Inc., the second largest newspaper publisher in the country, reported a small increase in third-quarter earnings and reaffirmed its fourth-quarter forecast Monday, despite continued sluggish revenues and advertising.

The San Jose, Calif.-based company said it earned 67 cents per share, or $56.5 million, for the July-September quarter -- in line with a lowered outlook issued last month by the company. A year ago, the company earned 65 cents per share, or $55.7 million, in the third quarter.

Excluding a one-time cost of $18 million associated with the conversion of its CareerBuilder business from a corporation to a limited liability company, the company earned 81 cents per share. That met the expectations of analysts surveyed by Thomson First Call.

The company also said it expects to earn $1.14 per share in the fourth quarter and $3.46 per share for the full year, also in line with Thomson First Call estimates.

In morning trading on the New York Stock Exchange, shares of Knight Ridder were up 55 cents to $55.73.

Despite the gain in net income, total operating revenue was softer in the third quarter, coming in at $689.0 million, 0.6% below the $693.1 million recorded at the same time a year ago.

The decline reflected continued weakness in advertising, particularly in the classified sections. Classified ads fell to $207.2 million in the third quarter, from $221.5 million a year ago.

Knight Ridder, which publishes 32 daily papers, said losses continued at some of its biggest papers.

The San Jose Mercury News saw its total advertising revenue drop 8.8% from the same quarter a year ago, chiefly on a 26.2% decline in classified ads. The newspaper is located in Silicon Valley, which is an economic slump.

At The Philadelphia Inquirer, total advertising revenues fell 4.1%, primarily on declines in national and classified advertising.

Knight Ridder Chairman and Chief Executive Tony Ridder expressed optimism about September's results. "Total advertising revenue, down just 0.1% versus the same period last year, showed the best comparison we have seen since the final quarter of 2000. In September, total advertising revenue was up 2.2%, the largest monthly increase since October 2000," he said.

Circulation revenue also slipped, falling to $119.1 million, from $127.7 million the previous year.

Year-to-date, the company continues to outperform from a year ago. For the first nine months of the year, Knight Ridder earned $160.82 million, or $2.17 per share, compared with $109.85 million, or $1.28 per share at this point in 2001.