Knight Ridder, parent of 31 daily newspapers including The Miami Herald and Philadelphia Inquirer, posted net income of $50.7 million, up 84.4% from the year-ago period on flat revenues of $677.4 million. But after factoring out $24.3 million due to an accounting change in 2002, net income dropped 2.1%. The change was related to the accounting of goodwill involved in CareerBuilder, a joint venture between Knight Ridder, Gannett Co. and Tribune Co.
Advertising revenue was up 0.3% for the quarter due to a March advertising slowdown caused by the war in Iraq. While ad revenue rose 1.9% in January and 1.1% in February, it slumped 2.3% in March.
The worst ad weakness was in the classified category, where revenues dropped 2.9% for the quarter, mainly due to low rates of recruitment advertising, said the newspaper division's president, Steve Rossi. He noted most markets saw year-over-year drops in help-wanted ads ranging from 13.7% to 43.9%.
Prospects for the second quarter are unclear, due to the war and its aftermath, said Chairman-CEO Tony Ridder, but he added that the second half is expected to show improvement.
Tribune revenue up
Meanwhile, an advertising upswing helped Tribune Co., parent of the Los Angeles Times, Chicago Tribune and Newsday, post a net income of $141.2 million for the quarter, up from a loss of $101.6 million in the same period last year; after factoring out the effects of a change in accounting in 2002, net income would have been up 120% from $64 million. The company credited its performance to cost controls and improvements in local advertising.
Revenues rose 5% to $1.29 billion, thanks to strong revenue in its TV division and improvements in newspaper advertising.
Newspaper retail advertising was up 2%, with health care, food and home furnishing categories performing well, while national advertising rose 6% thanks to strength in high-tech and automotive advertising. Classified advertising dropped 1% for the quarter, with a 12% drop in help-wanted offsetting a 12% increase in real estate advertising. Television revenues rose 13%, thanks to stronger ratings performance by WB affiliates in Tribune's TV station group.
"Everything in recent weeks have been impacted by the war, but overall, it's a good story for us," Tribune President-CEO Denis FitzSimons said.
After a drop in March, newspaper advertising is performing better in April, thanks to stronger retail advertising, which is being helped by Easter falling in April from March, Mr. FitzSimons said. He added that April TV ad sales are also pacing up in the mid-single-digit percentages.