Newspaper Financial Reports

By Garneau, George | Editor & Publisher, November 21, 1992 | Go to article overview

Newspaper Financial Reports


Garneau, George, Editor & Publisher


SHARPLY HIGHER THIRD-QUARTER profits at most publicly traded newspaper companies resulted more from lower costs than from improving business conditions, analysts say.

Newspaper revenue grew only modestly at most companies, with many papers still reporting lower advertising volume in the three months ended Sept. 30 than they did in the same period last year.

Meanwhile, newsprint prices are the lowest in years, due mainly to weak demand, and many papers have already trimmed their staffs during two years of recession. With smaller payrolls and big savings on newsprint, even modest sales growth went directly to the bottom line.

Knight-Ridder Inc. reported the best year-to,year newspaper advertising results since 1990, and paper, ink and materials costs were nearly 19% below last year's third quarter.

Knight-Ridder chief financial officer Robert F. Singleton noted, "However, we have not seen any clear signal that the end of the recession is at hand."

"Although revenues for some papers are increasing, albeit marginally, it is lower costs, particularly from discount newsprint, that remains the key," said analysts Kenneth Berents and Karen R. Ficker of Alex Brown & Sons.

The analysts predicted "only a weak recovery" for the rest of the year because of the sluggish economy and because of "secular," or permanent, declines in newspaper advertising.

Following are summaries of third-quarter earnings reports filed by the leading publicly traded newspaper companies.

AFFILIATED PUBLICATIONS

Affiliated Publications Inc., owner of the Boston Globe, reported third-quarter net income of $5.9 million, or 8 [cents] a share, compared with a loss of $1 million, or 1 [cents] a share, a year earlier.

Quarterly revenues rose 6.8% to $99.9 million, and operating profit more than tripled, to $11.5 million, from $3.4 million a year earlier.

The third-quarter loss last year resulted from a $4 million pretax, or 3 [cents] a share after tax, charge to reduce the ranks of management.

Both advertising and circulation revenues increased in the quarter, while administrative costs declined.

The quarter raised nine-month net earnings to $2.3 million, or 3 [cents] a share, compared with $1.1 million, or 2 [cents] a share, a year before.

1992 results are in accordance with new accounting standards, which reduced net income by $13.7 million, or 20 [cents] a share.

A.H. BELO CORP.

A.H. Belo Corp., owner of the Dallas Morning News, reported soaring revenues and profits in the three months ended Sept. 30 as the company reaped the benefits of improved broadcast advertising and the Dallas Times Herald's closure last year.

Third-quarter net earnings more than tripled to $7.1 million, from $1.9 million a year earlier, and per-share earnings jumped to 36 [cents], from 10 [cents].

Quarterly revenues rose 22.8% to $127.8 million, and operating profits soared to $19.1 million, from $10.5 million a year earlier.

Increases resulted from higher ad volume and rates and higher circulation since the Times Herald closed, eliminating the Morning News' competition.

Belo's newspaper revenues, from the Morning News and Dallas-Fort Worth Suburban Newspapers, rose 27.1% to $78.9 million, and operating profits rose to $11.12 million, from $5.9 million.

At the Morning News, retail ad volume rose 6.4%, and in classified categories, help-wanted rose 4.8% and real estate jumped 16.5% in the quarter, compared with a year earlier, when the Times Herald was still publishing.

Belo said that Morning News circulation rose about 25% daily and over 30% Sunday since the Times Herald closed last December and Belo purchased its assets.

Broadcast revenues rose 16.3% to $48.9 million, and operating earnings rose to $12.5 million, from $7.2 million.

Sharply higher payroll and materials expenses raised total operating expenses to $108. …

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