Newspaper Publishers' Mixed Results Reflect Ad Market

Dow Jones & Co Inc. (DJ), Knight Ridder Inc. (KRI) and E.W. Scripps (SSP) reported a mixed bag of quarterly results Thursday, reflecting a volatile advertising environment that is particularly weighing on big newspapers.

Dow Jones and Scripps both warned that their profit for the current fourth quarter could fall short of Wall Street forecasts. Knight Ridder did not provide an earnings outlook but said it expects revenue gains to continue to grow in the quarter as it works to keep expenses under control.

Scripps and Knight Ridder both said their third-quarter results were hurt by recent hurricanes in Florida. Scripps owns four newspapers and two television stations in Florida, while Knight Ridder publishes The Miami Herald (search).

Newspaper publishers have reported "very mixed results," said Edward Atorino, a publishing analyst at Fulcrum Global Partners. The outlook is "sort of improving but not dramatically, and the fourth quarter is looking like it's going to be a challenging quarter."

Scripps stock fell about 2 percent on Thursday, while Dow Jones was down about 0.9 percent. Knight Ridder was up slightly, about 0.4 percent.

Industrywide, newspapers have been struggling to consistently increase their ad revenue after several rough years when corporate ad spending was reduced because of the economic downturn, the Sept. 11, 2001 attacks, and the war in Iraq, among other factors.

A string of scandals involved overstated circulation data at Tribune Co. (TRB), Hollinger International Inc. (HLR) and Belo Corp. (BLC) also has put pressure on newspaper publishers, whose stocks for the most part have underperformed the broader market this year.

Publishers' quarterly results show an unsteady advertising market, with newspapers in smaller and mid-size markets generally outperforming those in bigger markets that are more dependent on advertising from big national companies like those in the technology industry or movie studios.

Dow Jones said third-quarter results were hurt by weak technology advertising at its flagship Wall Street Journal (search). The New York-based company forecast ad linage at the U.S. edition of the newspaper likely would slip in the fourth quarter.

Dow Jones reported third-quarter profit of $12.1 million, or 15 cents a share, compared with $28.6 million, or 35 cents a share, in the corresponding period of 2003 when results included a special tax gain.

Knight Ridder said quarterly ad revenue climbed a modest 3.2 percent, with all of its large markets showing gains except for Miami, where results were hurt by the recent hurricanes. It said September ad sales rose 4.3 percent, with combined revenue for 18 of its mid-sized and smaller newspapers powering the growth with an 8 percent increase.

Profit at San Jose, California-based Knight Ridder rose to $76.9 million, or 99 cents a share, including a tax-related gain, up from $69.1 million, or 85 cents a share, a year earlier.

Cincinnati-based Scripps, whose holdings include The Food Network (search) on cable TV and the Rocky Mountain News (search) newspaper in Colorado, said quarterly profit was $55.6 million, or 34 cents a share, up from a year-earlier $51.9 million, or 32 cents a share after adjusting for a 2-for-1 stock split last month. It said the hurricanes hurt its profit by 2 cents a share.