Magazine article Editor & Publisher

Newspapers, Present and Future: Good in 1999! Better in 2000?

Magazine article Editor & Publisher

Newspapers, Present and Future: Good in 1999! Better in 2000?

Article excerpt

One year ago, the mood among newspaper executives was somber, as ad revenue growth was predicted to slow in the coming year.

Prognosticators have since torn up those forecasts and raised their estimates for 1999, while newsprint prices dropped below expectations. And so, despite the absence of elections or Olympics to drive ad spending, the year is shaping up to be a strong one for newspaper companies.

At dueling media investors' conferences hosted by PaineWebber and Donaldson, Lufkin (and) Jenrette (DLJ) in New York last week, some of the nation's biggest newspaper publishers boasted they would beat earnings estimates for the year while announcing ambitious goals for next year.

Knight Ridder CEO P. Anthony Ridder summed up the feelings of many in the industry when he told investors at DLJ's confab, "The newspaper business is strong, and it's particularly strong right now."

At Knight Ridder, the second-largest U.S. newspaper group in terms of circulation, ad revenues are up, classified revenues are improving, and Internet revenues are growing, he said.

Ridder said the company expects to beat the analysts' consensus earnings-per-share estimate of three dollars and twenty-six cents for 1999. Profit margins should reach 18.5 percent this year and top 20 percent next year, he said.

Gannett Co. Inc., the top company in terms of circulation, said it expects to finish 1999 with a 14 percent increase in earnings, better than it projected a year ago. Driving the growth: stronger-than- expected results at its newspapers, including strong performances at USA Today and The Detroit News.

In 2000, Gannett expects newspaper ad revenues to be up 2 to 4 percent, led by classifieds, and circulation flat to up 1 percent. As its papers continue to convert to narrower web widths, the group anticipates a 5 to 7 percent savings on newsprint usage.

In a turnaround from last year, Times Mirror Co. executives were ebullient. In a year of more than 20 percent earnings-per-share growth, the once-stagnant flagship Los Angeles Times improved, the company's East Coast newspapers showed record results, and the company decided to shed its sputtering units. Look for another year of double-digit EPS growth in 2000, with revenues rising 6 to 7 percent, CEO Mark H. Willes said.

Strong national category growth powered a 7 percent increase in ad revenues at the L.A. Times in 1999, and the paper increased its daily circulation 1 percent in the six months ended Sept. 30, Publisher Kathryn M. Downing said. For 2000, she plans to grow daily circulation by 3.7 percent, partly by competing aggressively for readers in Orange County and the Inland Empire, the fast-growing region east of Los Angeles. …

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