Profits strong despite ad slowdown p.20

By: Lucia Moses Publicly held newspaper companies continue to report strong fourth-quarter profits ? often meeting or beating analysts' predictions ? despite slower growth in advertising revenue and higher newsprint prices. Following are summaries of the latest earnings reports.

A.H. Belo
A.H. Belo Corp. reported steeply lower fourth-quarter net income as a result of a write-down and severance payments at its flagship, The Dallas Morning News.
Quarterly net income of $11.7 million, versus $24 million in the year-ago period, included $26.2 million in charges that lowered net earnings 13? a share. Excluding the charges, earnings slipped 2? a share.
Belo's broadcast and newspaper operations ended the year with higher revenues but slower growth in advertising revenue.
Belo said its Providence Journal in Rhode Island and Press-Enterprise in Riverside, Calif., each raised 1998 cash flow by high single-digit percentages.
Belo reported fourth-quarter revenues grew 4% to $379 million, and 1998 revenues advanced 12.7% to $1.4 billion, compared with year-earlier periods.

Central Newspapers
The Phoenix-based publisher of The Arizona Republic and The Indianapolis Star-News reported increases in earnings for the fourth quarter and the year.
Fourth-quarter net income rose to $24.2 million, from $23.8 million in the year-ago period, while revenues increased to $197.6 million from $191.5 million. The earnings met consensus estimates from analysts reporting to First Call.
Advertising and circulation revenues were up for the quarter and the year. In the five weeks ended Dec. 27, average paid circulation slid 14.6% and 11.4% at the News and Star, respectively, and rose slightly at The Arizona Republic.
Charges, including the cost of staff cuts, in the fourth quarters of 1998 and 1997, depressed earnings.
For the year, net income gained 8.6% to $88.5 million as revenues rose 5.1% to $752.6 million.
With 75 dailies and the most U.S. circulation, Gannett Co. reported 12% higher fourth-quarter net earnings, largely because of strong newspaper advertising.
Gannett posted quarterly net earnings of $257.7 million, or 92? a diluted share, up from $230.4 million, or 80? a share, from a year earlier. Analysts polled by First Call had estimated 91? a share. Revenues rose 5.5% to $1.39 billion.
In the newspaper division, advertising increased 9% in the fourth quarter and 11.7% in the full year, led by USA Today.
The television group benefitted from ad sales associated with the Super Bowl, Olympics and politics ? all of which combined to offset softening ad demand in the fourth quarter.
Gannett sold its remaining five radio stations and bought three TV stations last year. It also repurchased about 6 million shares of common stock.
For the year, net income surged 40% to $1 billion as Gannett sold its security businesses. Revenues advanced 8.3% to $5.1 billion.

Gray Communications
The Albany, Ga.-based company reported sharp net income increases for the fourth quarter and the year.
Gray reported quarterly net income of $475,000 for the quarter, compared with a $401,000 loss in the year-ago period, when it bought GulfLink Communications and NBC affiliate WITN-TV in North Carolina. Excluding unusual items, Gray reported earnings of $713,000 for the quarter.
Quarterly revenues jumped 26% to $37 million ? a 17% gain when extraordinary items are factored out.
For the year, net income was $41.6 million, compared with a $1.4 million net loss in 1997, as revenues rose 24% to $128.8 million.
Gray owns papers in Georgia and television stations in the Southeast.

McClatchy Co.
Sacramento, Calif.-based McClatchy Co. reported earnings were up higher than expected in the fourth quarter on the strength of the Minneapolis Star Tribune.
McClatchy reported net income of $21 million, or 47? a share, compared with $20.5 million in the year-ago quarter. Analysts polled by First Call had predicted 41? a share. Net income was helped by sales of small businesses in both years.
Revenues for the period rose 62% to $274.6 million, thanks to the acquisition of the Star Tribune last year. Revenues from continuing sources rose 2%.
For the year, earnings fell to $61 million, from $69 million, as revenues rose to $968.7 million, from $642 million.
CEO Gary Pruitt says the Star Tribune performed better than expected, newsprint prices were lower than expected and retirement costs dipped due to a pension plan merger.

Media General
Media General Inc. posted sharply higher fourth-quarter and full-year 1998 net earnings. It attributed the gain to TV stations acquired in 1998.
The Richmond, Va.-based publisher of the Richmond Times-Dispatch reported quarterly net income of $22 million, or 82? a share, compared with from $20 million, or 75? a share, in fourth quarter 1997. Revenues rose 4% to $251 million.
Chairman and CEO J. Stewart Bryan III says the publishing division enjoyed good gains in classified but the retail category was "lackluster" and overall "the pace of advertising appears to be slowing."
Cable and broadcast TV operations posted higher operating earnings, while profit from newsprint manufacturing declined due to high raw materials cost and lost production because of maintenance.
Media General reported 1998 net income of $70.8 million, compared with a $10.5 million loss in 1997. Revenues grew 7% to $974 million. Not counting a one-time charge in 1997, earnings rose 35% in 1998.

New York Times Co.
The New York Times Co. posted gains in earnings and revenues for the fourth quarter and the year, despite the sale of six magazines in 1997.
Net income per diluted share rose to 45?, from 40?.
Newspapers raised fourth-quarter operating profits 11% and broadcast operations reported a 20% lift, compared with the quarter in 1997. Weaker help wanted advertising at the Boston Globe and higher newsprint expenses slowed newspaper profit growth, while broadcasting benefited from strong political advertising.
Net earnings rose 6.3% for the year to $278.9 million. Excluding one-time items, earnings rose 5.7% in the quarter and 13.5% in the year.
Revenues increased to $782 million from $768 million for the fourth quarter and to $2.9 billion from $2.8 billion.

Pulitzer Publishing
Pulitzer Publishing Co. reported fourth-quarter net income of $24.2 million, a 23% increase from a year earlier.
Pulitzer said fourth-quarter revenues rose to $163.8 million, from $156.3 million in the period a year before. The owner of the St. Louis Post-Dispatch,
The Arizona Daily Star and community papers said publishing revenues rose 3.6% to $97.7 million, as broadcast revenues increased 6.5% to $66 million due to a surge in political advertising.
For the year, net income rose 15.5% to $76.3 million as revenues climbed 4.7% to $612.7 million, compared with 1997 figures.

The Montreal-based media giant reported strong fourth-quarter and yearly profits, buoyed by the sale of its check and credit card businesses and increased earnings from print media and forest products.
Net income advanced 19.7% to C$59 million as revenues jumped 24% to C$2.5 billion for the quarter.
For the year, Quebecor reported net income rose 20% to C$172.7 million while revenues increased 20% to C$8.4 billion.
Newspaper revenues grew 10%
last year thanks to strong ad revenues, although increased newsprint prices helped slash operating income
nearly 10%.
For the latest earnings of publicly traded newspaper companies, see "Earnings Scorecard" on E&P's Web site (
?(Editor & Publisher Web Site: http://www.mediainfo. com) [Caption]
?(copyright: Editor & Publisher February 6, 1999) [Caption]


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