Knight Ridder Reports Big Profit Boost Due to Detroit, Tallahassee Sales

By: Knight Ridder Inc., one of the nation's largest newspaper publishers, on Friday reported that its third-quarter profit more than tripled, due mainly to a large gain from the sale of Detroit and Tallahassee operations.

Quarterly earnings totaled $253.2 million, or $3.56 per share, up from $76.9 million, or 99 cents per share, a year ago. The latest results included a gain of $207.9 million, or $2.94 per share, from the sale of its interest in Detroit Newspapers, the Detroit Free Press and the Tallahassee Democrat, as well as 2 cents per share from classifying those properties as discontinued operations.

Earnings from continuing operations fell to $43.6 million, or 61 cents per share, from $72.2 million, or 93 cents per share, a year earlier. The latest quarter included severance costs of 8 cents per share for job cuts and 2 cents per share from tax resolutions. The company said the results were slightly better than its prior guidance.

Revenue edged up 2 percent to $723.8 million from about $708 million last year.

Analysts polled by Thomson Financial expected earnings of 66 cents per share on $724.4 million in revenue.

In September, San Jose-based Knight Ridder warned third-quarter earnings from continuing operations would fall about 20 percent on softer advertising revenue at three of its large newspapers, as well as higher interest expenses, newsprint costs and expenses from Hurricane Katrina.

Advertising revenue grew 3 percent to $571.5 million from $554.8 million a year earlier, including acquired newspapers. In August, the company exchanged The Idaho Statesman as well as The Olympian and The Bellingham Herald in Washington state with Gannett Co. in exchange for the Tallahassee Democrat and cash.

"In the fourth quarter, excluding the acquired newspapers, we expect year-over-year cost increases to be up about 1 percent with depreciation playing a major role," said Chairman and Chief Executive Tony Ridder in a statement. "We will begin depreciating a portion of our new plant in Kansas City in the fourth quarter. We expect other operating expenses to be below last year."