Profits Continue to Dip: Most Publicly Held Newspaper Companies Report Lower First-Quarter Profits; but There Are a Few Exceptions

Article excerpt

Profits continue to dip

For newspapers, the recession is turning - from bad to worse.

Newspapers, which are hypersensitive to economic changes and are the first to feel signs of a recovery, were still in a downward mode during the three months ended March 31.

Publicly traded U.S. newspaper companies reported dramatically lower quarterly profits compared with first-quarter 1990. And 1990 was a down year.

The nation's newspaper publishers generally said they earned 25% to 66% fewer dollars than they had in first-quarter 1990.

Affiliated Publications, A.H. Belo and Pulitzer Publishing reported net losses for the quarter.

A continuing recession, plus higher costs of covering the Persian Gulf war, contributed to the earnings decline.

Among the few profits gainers were: Multimedia, 48.4% higher earnings; McClatchy Newspapers, up 26.1%; Lee Enterprises, up 7%.

Quarterly advertising linage declined significantly for most companies. And ad revenues, which had been holding steady due to price increases, declined substantially.

Circulation revenue generally rose as papers around the country raised newsstand prices to offset revenue lost as advertisers continued to lay low.

Most companies abandoned predictions of a turnaround late this year. Instead, hopes for a recovery were pushed back to late 1992.

Affiliated Publications

Affiliated Publications Inc., publishers of the Boston Globe, reported a net loss of almost $1 million, or 1 [cent] a share, for first-quarter 1991, compared with net income of $6.5 million, or 9 [cents] a share, a year earlier.

First-quarter operating income plunged 88% to $1.7 million.

Chairman William O. Taylor blamed reduced ad volume and $1 million in extra costs of covering the Persian Gulf war.

Revenue for the quarter slipped 3% to $128.6 million. Ad revenue declined by 10%, to $88 million, and circulation revenue rose 10%, to $32.1 million.

The Globe's revenues fell 10% to $92.8 million, pushing its operating income 85% lower, to $1.6 million.

Specialty publishing raised its revenues, but operating profits plunged by two-thirds to $1.1 million. Corporate expenses cost over $1 million.

A.H. Belo Corp.

A.H. Belo Corp., publishers of the Dallas Morning News, reported a net loss of $1.9 million, or 10 [cents] a share, in first-quarter 1991, compared with net profits of $2.8 million, or 14 [cents] a share, a year earlier.

Revenues slipped 3.8% to $94.2 million, and costs rose 4.8%, pushing operating profits 65% lower to $4.2 million.

Publishing revenues, mainly from the News, rose slightly to $56.3 million. Broadcasting revenues slipped 9.5% to $37.6 million.

Chairman and chief executive officer Robert W. Decherd expected positive net earnings for the rest of 1991, but below 1990 levels.

Capital Cities/ABC

Capital Cities/ABC Inc. reported first-quarter 1991 net income dived 44.9% to $58.6 million, or $3.50 a share, from $106.3 million, or $6.08 a share, a year earlier.

Quarterly operating income dropped by 38.3% to $130.3 million, as revenues slipped slightly to nearly $1.3 billion.

Publishing, making up about one-fourth of all revenues, saw its revenues decline 7% to $250.6 million and its operating income fall 24.2% to $18.4 million.

Broadcasting's revenue increased, but its operating income declined 40%. ABC Television Network reported slightly higher revenue but far lower operating profit.

The company reported some improvements since the war ended but said profits could decline again in second-quarter 1991.

Central Newspapers Inc.

Central Newspapers Inc., publishers of the Indianapolis Star-News, reported first-quarter net earnings dropped 27.8% to $3.9 million, or 15 [cents] a share, from $5.4 million, or 21 [cents] a share, a year earlier. …

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