Knight Ridder shares take hit after earnings warning

San Jose, Calif.--Knight Ridder Corp., parent company of the San Jose Mercury News, The Miami Herald and 30 other newspapers, warned Thursday that it will miss earnings estimates for its third quarter amid the continuing advertising slump.

Wall Street drove the stock of the company down $4.53, or more than 7%, to $57.91 on the announcement.

In a statement, Knight Ridder Chairman-CEO Tony Ridder said he now expects third-quarter earnings to be about 81 cents a share, well below the 87 cents a share that Wall Street analysts had been expecting, according to Thomson Financial/First Call.

Knight Ridder said its August operating revenue fell 1.3% from a year ago to $212 million.

--Matthew Schwartz