Posted on 04/17/2006 4:52:23 AM PDT by abb
NEW YORK (Reuters) - Knight Ridder Inc. (KRI.N: Quote, Profile, Research), the newspaper publisher being acquired by McClatchy Co. (MNI.N: Quote, Profile, Research), said on Monday first-quarter earnings fell 53 percent as stock-based compensation and sale-related expenses undercut profits.
Net profit fell to $28.4 million, or 42 cents a share, from $60.5 million, or 79 cents a share, a year earlier.
Stock-based compensation depressed first-quarter earnings by 5 cents per share, and sales-related expenses knocked 6 cents off the bottom line.
A 12 percent decline in national ad revenue also dragged on earnings.
Analysts, on average, expected the company to earn 59 cents a share, according to Reuters Estimates.
Operating revenue rose 4 percent to $740 million.
"The quarter was challenging," Tony Ridder, chief executive officer of Knight Ridder, said in a statement. "With total ad revenue up only 1 percent, and with the persistence of the soft revenue patterns across the industry for many months now (employment and real estate excepted), we continue to look to the second half for improvement."
McClatchy agreed in March to buy Knight Ridder for about $4.5 billion and would become the second largest U.S. newspaper chain.
McClatchy has said it plans to sell off 12 of its slower-growth newspapers, including marquee titles San Jose Mercury News and Philadelphia Inquirer.
Knight Ridder (KRI:NYSE - commentary - research - Cramer's Take) missed first-quarter estimates Monday in what the chairman of the newspaper chain called a "challenging" period.
The San Jose, Calif., company, which has agreed to sell itself to rival McClatchy (MNI:NYSE - commentary - research - Cramer's Take), said its continuing operations profit was just half of the year-ago level, as revenue rose 4% but costs surged 7%.
For the quarter ended March 26, Knight Ridder made $28.4 million, or 42 cents a share, down from the year-ago continuing operations profit of $57.1 million, or 76 cents a share. The latest quarter was hit by 6 cents a share in costs related to the company's decision to put itself on the block and 5 cents for stock-based compensation. Excluding those costs, the latest-quarter profit was 53 cents a share, 6 cents shy of the Thomson Financial analyst estimate.
Revenue rose to $740 million from $712 million a year ago. Advertising revenue rose 4.4% and circulation revenue rose 2.8%. Operating profit fell 16%.
"Results were particularly weak in Akron and Philadelphia, where ad revenue was down 10.8% and 5.5%, respectively," CEO Tony Ridder said. "The operating profit downturn at these two newspapers represented 37% of the downturn in GAAP operating profit and 53% of the downturn in adjusted pro forma operating profit.
"On the other hand, results were encouraging at a number of the newspapers, including good gains in the markets that have tended to be strong for some time -- overall ad revenue was up 8.6% in Contra Costa, 6.1% in San Jose, 4.6% in St. Paul, 4.1% in Miami and 3.8% in Fort Worth. In this respect, it is worth noting that the increase in advertising revenue for the 20 newspapers that The McClatchy Company intends to retain in its proposed acquisition of Knight Ridder, was 2.3% in the first quarter of 2006. Advertising revenue for the 12 newspapers that McClatchy intends to divest declined by 0.4%."
Music to my ears. boooyah MSM.
"The quarter was challenging,"
Reminds me of the little girl in the Donner party who wrote,"It was a rough winter."
aahhhhhhhhhhhh! 2 bad!
Check out this story - absolutely hillarious...
Sorry, here's the link
http://www.freerepublic.com/focus/f-news/1616327/posts
PITY PARTY NOT
Looks like they have decided to bash Rummy instead of Bush for a change. Looks like K-R is the only thing holding back the Dow!
Pray for W and Our Freedom Fighters
""The quarter was challenging," Tony Ridder, chief executive officer of Knight Ridder, said in a statement. "With total ad revenue up only 1 percent, and with the persistence of the soft revenue patterns across the industry for many months now (employment and real estate excepted), we continue to look to the second half for improvement.""
This has to be the Enronning/Arthur Andersen statement of the day: ""The quarter was challenging," Tony Ridder, chief executive officer of Knight Ridder, said.""
Marketwatch.com's version of the news...
Knight Ridder profit declines sharply
Spike in interest expense, fees to explore sale weigh on results
By David B. Wilkerson, MarketWatch
Last Update: 10:22 AM ET Apr 17, 2006
CHICAGO (MarketWatch) - Newspaper publisher Knight Ridder on Monday reported a sharp drop in first-quarter earnings from those of a year ago on higher interest expense, fees related to its exploration of strategic options, the expensing of stock-based compensation and the absence of certain publications that were sold during 2005.
San Jose, Calif.-based Knight Ridder (KRI) agreed in March to be sold to McClatchy Co. (MNI) for $6.5 billion.
"The quarter was challenging," said Tony Ridder, Knight Ridder's chairman, in a statement. "With total ad revenue up only 1%, and with the persistence of the soft revenue patterns across the industry for many months now (employment and real estate excepted), we continue to look to the second half for improvement."
Knight Ridder said it earned $28.4 million, or 42 cents a share, compared with a year-ago profit of $60.5 million, or 79 cents a share.
The figure in the latest three months includes 6 cents a share in expenses related to the company's exploration of strategic alternatives, which culminated in the sale to McClatchy, as well as 5 cents a share in expenses related to stock-based compensation.
Excluding these items, the company would have earned 53 cents a share in the latest quarter.
Knight Ridder also saw interest expense soar about 74% to $32.8 million, due to increased borrowing and ongoing hikes in interest rates.
The year-earlier quarter includes 4 cents a share in earnings from the Detroit Free Press and the Tallahassee (Fla.) Democrat, both of which have since been sold, as well as 10 cents a share on a tax benefit.
Revenue rose to $739.9 million from $711.8 million.
Analysts polled by Thomson First Call were expecting a profit of 59 cents a share on revenue of $732.8 million.
On a pro forma basis, excluding the Detroit and Tallahassee papers and assuming Knight Ridder had otherwise owned the same assets in both quarters, operating revenue was up just 0.5%, with total advertising revenue up 1%.
Circulation was down 1.2%, also on a pro forma basis.
Advertising patterns for Knight Ridder were in line with the newspaper industry's lackluster performance over the past several quarters, and echoed much of what newspaper companies said last week when they reported first-quarter results.
National ad revenue fell 9% from the first quarter of 2005, with much of the damage coming from Knight Ridder's largest markets. Telecommunications, which accounts for about 28% of the national category, dipped 6.1%. National auto ad sales plunged 36% on a decline in spending by automaker General Motors (GM) . Entertainment was down 17%, while airlines plummeted 30%.
Retail was down 0.8%, as gains in home furnishings, grocery and office supply ads were offset by declines in department store, home electronics and general merchandise sales.
Classified was up 7.3%, as help-wanted revenue climbed 15% and real estate revenue was better by 22%. Classified automotive ad sales persisted in their weakness, dropping 11.4%.
Circulation copies fell 4.3% for daily editions, and 4.4% on Sundays.
Knight Ridder shares were up fractionally at $24 in morning trading.
David B. Wilkerson is a reporter for MarketWatch in Chicago.
All sorts of good news out today, Dave.
http://www.freerepublic.com/focus/f-news/1616417/posts
http://www.freerepublic.com/focus/f-news/1616327/posts
http://www.freerepublic.com/focus/f-news/1616376/posts
http://www.freerepublic.com/focus/f-news/1616323/posts
Dave, here's the nut graf:
"Results were particularly weak in Akron and Philadelphia, where ad revenue was down 10.8% and 5.5%, respectively," CEO Tony Ridder said. "The operating profit downturn at these two newspapers represented 37% of the downturn in GAAP operating profit and 53% of the downturn in adjusted pro forma operating profit."
I would say those two newspapers have a limited time to live...
Oh, well, they can always stand in the unemployment line with Pinch and the rest of the media giants (smirk).
Pinch and his heirs will be able to milk their special stock of the NY Slimes way after everyone else loses most of their value.
""Results were particularly weak in Akron and Philadelphia, where ad revenue was down 10.8% and 5.5%, respectively," CEO Tony Ridder said. "The operating profit downturn at these two newspapers represented 37% of the downturn in GAAP operating profit and 53% of the downturn in adjusted pro forma operating profit."
Please Lord, let Ron Burkel and union thugs across the country buy these losers. Then, they can back up dump trucks loaded with liberal money to dump into these black holes.
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