Pulitzer 4Q Profits Down, Ad Revenues Up

By: E&P Staff On the day it is expected to receive formal bids for a sale of all or some of its newspapers, St. Louis-based Pulitzer Inc. said its profit fell 5% in the fourth quarter of 2004, compared with the year before, while operating revenue increased 3.6%.

Pulitzer said Monday its fourth-quarter net income was $13.7 million, $0.62 per diluted share, compared with $14.3 million, or $0.66 per diluted share, in the last period of 2003. Fourth-quarter operating revenue increased 3.6% to $118.1 million from $114.1 million in the prior year, and operating income decreased 7.2% to $25.6 million, the chain said.

On a same-publication basis, Pulitzer said ad revenues were up 8.7% at its Pulitzer Newspapers Inc. group, and up 1.7% at the flagship St. Louis Post-Dispatch and St. Louis market community papers.

Pulitzer made no announcement related to its possible sale, except to note that the fourth-quarter results included expenses related to "the exploration of a range of strategic alternatives to enhance shareholder value, including the possible sale of the company." The company scheduled no conference call to discuss the results

President and CEO Robert C. Woodworth in a statement said the overall ad revenue increased 4.2% during the quarter, "reflecting continued strong performances at Pulitzer Newspapers and across-the-board strength in the preprint category." He said classified advertising was up 6.1% for the quarter, "in spite of weakness in the automotive category that began at the end of the third quarter." He said classified was led by the help-wanted category, which was up 9.3 percent in St. Louis and 32.6% at PNI.

Retail revenue, including retail preprint revenue, increased 2.9%. Woodworth attributed the increase to "the solid performance of Local Values, the St. Louis direct mail initiative," and continued strength in the Pulitzer papers outside St. Louis.

Fourth-quarter earnings per share excluding some extraordinary items were $0.73, compared with a similarly determined $0.68 per share for the fourth quarter of 2003, Pulitzer said.

Pulitzer also indicated in its statement that it had reached a "tentative settlement of pending IRS matters." Since 2001, Pulitzer has fought claims from the Internal Revenue Service that it owes about $30 million in tax on the $1.85 billion spin-off of its radio and TV stations in 1999. Pulitzer argued the acquisition of its broadcast properties by Hearst-Argyle Television Inc was a tax-free event, and in 2002 asked for a tax refund of $8.1 million plus interest. In its fourth-quarter 2004 results, Pulitzer said it had incurred a pre-tax expense of $100,000 relating to the tentative settlement of the claims. No further information about the tentative settlement was disclosed.


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