By: (AP) Knight Ridder Inc., one of the nation's largest newspaper publishers, said Thursday that second-quarter earnings fell 13.8 percent from a year ago, due in part to declines in circulation revenue as well as increased severance costs.
Net income declined to $74.4 million, or $1 per share, for the three months ended June 26 from $86.3 million, or $1.08 per share, a year ago.
The latest quarter includes a 3-cent gain from the favorable resolution of prior-years' tax issues, including interest, offset by a 1-cent charge for severance in Detroit.
The year-ago quarter included gains of 10 cents per share on tax issues and favorable adjustments in Detroit, primarily post-retirement benefits. Excluding one-time items, Knight Ridder said earnings would have fallen 6.9 percent year-over-year.
Total revenue edged up to $761.5 million from $760.2 million last year. Advertising revenue rose to $604.2 million from $591.7 million in the same quarter of 2004. Circulation revenue, however, fell to $132.3 million from $136.4 million last year.
Analysts surveyed by Thomson Financial were looking for earnings of 99 cents per share on sales of $769.4 million.
Knight Ridder Chairman and CEO Tony Ridder said, "In a pattern that has been consistent since March, the bright spots continue to be retail, help wanted and real estate. The soft spots continue to be classified automotive and national, although national did turn positive -- by one-tenth of one percent -- in June. While the June ad revenue increase of 0.9 percent was a bit lower than April and May, it is encouraging to see that July is currently running close to 3 percent, with national considerably improved."
For the quarter, Knight Ridder said costs rose 2.1 percent, with labor and employee benefits up a modest 0.4 percent and newsprint, ink and supplements up 6.2 percent. Interest expense also increased, reflecting both higher rates and higher outstanding debt. Losses from equity investments decreased, due to better results from CareerBuilder and Seattle.
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