Newspapers see uneven results

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The advertising recovery remains elusive and uneven for newspaper companies, which reported improving results for the second quarter.

"Things are moving up a little bit better, but no great positive upticks," said Douglas McCorkindale, chairman-CEO of Gannett Co. The parent company of USA Today posted net income of $324.3 million for the quarter, up 6.7% from the year-ago period, on a 5.7% increase in revenue to $1.71 billion.

"We are in an extended trough," said Tony Ridder, chairman-CEO of Knight Ridder. The parent of the Miami Herald and Detroit Free Press posted second-quarter net income of $77.2 million, up 0.5% from the year-ago period, on revenue of $721.6 million, up 5.6%.

Overall, second-quarter results were affected by the war in Iraq and the outbreak of severe acute respiratory syndrome in Asia, but the effects lessened as the quarter progressed. Leonard P. Forman, chief financial officer of The New York Times Co., noted ad revenues for the company's newspaper group-which includes The New York Times and Boston Globe-were down 0.7% in April, then rose 1.8% in May and 4.6% in June. New York Times Co. posted $72.8 million in net income, down 7.5% from a year ago, on revenues of $801.9 million, up 3.8%.

The newspaper companies reported mixed but improving results in auto, retail and consumer goods advertising, with improvement in the financial advertising categories and weakness in travel advertising due to the war and SARS.

Indeed, financial advertising has shown "intermittent signs of life," during the quarter, especially in mutual-fund advertising, said Christopher Vieth, chief financial officer of Dow Jones & Co. Dow Jones-parent of The Wall Street Journal-posted $30.8 million in net income, down 43% from a year ago; after adjusting for an insurance payoff and asset sales in 2002, net income was down 3.7%. Revenues dropped 5.6% to $393.6 million, led by a 7.9% drop in ad lineage at the Journal.

signs of life

Dennis FitzSimons, president-CEO of Tribune Co., noted retail and national advertising is up in the mid single-digit percentages in early July and help wanted, while still down, is showing improvement over past months. Tribune posted net income of $229.5 million, up 100.9%, partly due to asset sales this year and losses in 2002. Revenue was up 5% to $1.45 billion, thanks to a 3.1% increase in advertising revenue at its newspaper unit, which includes the Los Angeles Times and Chicago Tribune.

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