Election Section

Washington Post in slump, earnings low

The Associated Press
Tuesday October 23, 2001

WASHINGTON — The Washington Post Co. reported a 95 percent decline in third quarter net earnings due to an advertising slump and charges to write down investments. 

The company, whose properties include The Washington Post and Newsweek, reported net income of $1.6 million, or 14 cents per share, compared with $33.5 million, or $3.51 per share, in the period a year ago. 

Excluding the effect of about $26 million in investment write-downs, earnings for the most recent quarter were $15.1 million, or $1.56 a share, above the $1.39 per share analysts surveyed by Thomson Financial/First Call were expecting. 

The company attributed the decline to a 19 percent drop in advertising revenue at its advertising-based businesses. That includes its flagship newspaper, where ad revenue fell 20 percent in the quarter, as well as at its television stations, which saw a 23 percent decline. 

However, Newsweek magazine had what the company described as a “significant spike” in newsstand sales following the Sept. 11 terrorist attacks. Revenues were also higher at its Kaplan test preparation and educational services division. 

Total revenues fell 1 percent to $595.5 million from $602.4 million in the period a year ago. 




ORK (AP) — The New York Times Co. reported a sharp drop in earnings for its third fiscal quarter as declining advertising revenues fell further in the wake of Sept. 11. 

The Times posted net earnings of $43.8 million in the three months ended Sept. 30, down 42 percent from $75 million in the period a year ago. Taking out one-time gains and charges, which included expenses related to staff reductions, profits fell 27 percent to $46.3 million versus $63 million. 

Total revenues fell 9 percent to $696.9 million, versus $767.7 million in the period a year ago, and were led by a decline of 16 percent in advertising revenues to $452.7 million. Excluding revenues from properties that were sold, overall revenues declined 8 percent and advertising revenues fell 15 percent. 

Earnings per share fell to 30 cents, compared with 37 cents in the year-ago period. The results were in line with analyst estimates reported by Thomson Financial/First Call. Like other newspaper publishers and media companies, the Times warned investors last month that its third-quarter earnings would be affected by the terrorist attacks. 

The company said it lost $1.8 million in advertising revenues from its eight television stations as regular programming was interrupted for full-time news coverage following the attacks. 

The company also reported that advertising revenues in its newspaper group fell 15 percent in September compared to September 2000. 

Chief executive Russell T. Lewis told investors that despite the increase in news-related costs, the company still managed to record a 4.8 percent decline in overall expenses for the quarter. The Times has scaled back its work force this year and made other cost cuts due to the downturn in advertising. 

Lewis said the company received huge demand for its papers in the days following the attacks, and for several days printed three times the usual number of newsstand copies. 

For all of September, average daily circulation of the paper increased by about 130,000 copies, and Lewis said he is hopeful a good portion of the new readers will stay with the Times. 

Lewis added, however, that because the outlook for the fourth quarter remains unclear, the company could not offer investors guidance on how the next several months would play out. 

In addition to The New York Times, the company publishes The Boston Globe and 16 other newspapers. Newspaper publishing makes up 94 percent of the company’s revenues. 


On the Net: 


+++++ Knight Ridder earnings fall 27 percent 

SAN JOSE, Calif. (AP) — Knight Ridder’s net income plunged 27 percent in the third quarter as the Sept. 11 attacks led to a steep drop in newspaper advertising and higher costs associated with increasing news coverage. 

The nation’s second-largest newspaper publisher reported net income of $55.7 million for the three months ending Sept. 30, compared with $76.1 million in the period a year ago. 

Revenues slumped 10 percent to $693.1 million from $769.2 million. 

Per-share profits were 65 cents, in line with guidance the company issued a month ago and 2 cents above the estimate of analysts surveyed by Thomson Financial/First Call. Year-ago earnings were 87 cents. 

Chairman and chief executive Tony Ridder said the terrorist attacks cost the company $10 million, including $9 million in lost advertising revenue, after accounting for temporary increases from condolence ads, and additional costs of $2 million for extra editions and creating more space for news. Offsetting those costs were added circulation revenues of $1 million. 

Ridder said the attacks reversed a slight comeback in retail advertising. That combined with an already soft market for general advertising and help wanted ads turned September into a “memorably bad month,” he said. 

In a separate report, Knight Ridder said total advertising revenues at its newspapers fell 16 percent in September compared to September 2000. Year-to-date advertising revenues were off 7 percent. 

Ridder said that while the company’s prospects had started to look up in the weeks after the attacks, they fell back once the U.S. bombing campaign began in Afghanistan. But he noted that cost savings from a downsizing effort announced in April were paying off, and he added that newsprint costs were heading lower. 

He did not specifically lower the outlook for the company’s full-year earnings, which stand at $2.91 per share, as measured by Thomson Financial/First Call, but he noted that there still exists a “harsh revenue environment” and that achieving full-year earnings goals would be contingent upon “resumption of more normal business patterns.” 

Knight Ridder, based in San Jose, publishes 28 newspapers in major markets across the country, including the San Jose Mercury News, The Miami Herald and The Philadelphia Inquirer. 


On the Net