By: E&P Staff Knight Ridder reported that total advertising revenue for Q3 was up 3.2% or $545.5 million -- beating Merrill Lynch's forecast by $1.7 million. Total operating revenue for the company increased 2.1% or $722.2 million and total operating profit grew 3.9% to $134 million.
Overall for the quarter, retail advertising increased 2% and national advertising decreased 0.9%. Classified grew 6.4% because of strong gains in help wanted, up 15.6%, and real estate, up 9.5%.
Gary Effren, CFO of Knight Ridder, reported that retail was strongest in Contra Costa, Calif., up 9.4%, and in Philadelphia, up 4.6%. San Jose, Calif. and St. Paul, Minn., both experienced declines of 2.8%. Miami is also down significantly, 5.2%. Department-store advertising took a hit, down 2.9%.
National advertising was strongest in the Charlotte, N.C., and St. Paul markets, up 11.7% and 9.1% respectively. Philadelphia, Miami, San Jose, Kansas City, and Contra Costa all experienced declines as the airline, hotel and resorts, car rentals, and entertainment categories were significantly weak.
San Jose and Philadelphia both experienced surges in help-wanted advertising, up 24.5% and 5.9% respectively.
Circulation revenue declined for the quarter, down 2.9%. Daily copies declined 0.8% and Sunday copies declined 0.4%.
Knight Ridder did experience some upside, benefiting from "lower-than-anticipated increases in health care," bucking industry trends. Merrill Lynch noted that the company is also gaining traction on newsprint cost when it switched to a lower grade paper. Newsprint and ink expenses increased 3.6%.
Knight Ridder also finished September stronger than anticipated, with total advertising revenue up 4.3%.
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