Q4 Earnings Fall For US Newspaper Trio

25 January 2002

US newspaper groups continue to take a battering from the ad slump, with three announcing sharp falls in profits in recent days.

Wall Street Journal publisher Dow Jones reported a decline in earnings for the fourth quarter of over 60% to $29.2 million (excluding costs associated with the shift of its headquarters following September 11).

The group warned that first-quarter prospects were not great either. “We are dealing with a pretty severe recessionary environment, at least from an advertising standpoint,”' said chairman/chief executive Peter Kahn. “And nothing in the marketplace has improved for us or our direct competitors.”

Full-year 2001 revenues sank 27.1% at Dow Jones’ print division. Ad linage at the Wall Street Journal dived 37.6% last year, and the group said it would tumble 20%–30% in Q1, though would register single-figure growth over the whole of 2002.

Faring better is WSJ.com, which posted a fall in 2001 revenues of just 2.9%, while subscriber numbers increased 17% to 626,000.

Meanwhile, Tribune Company – owner of the Chicago Tribune and Los Angeles Times as well as TV stations and websites – said operating income tumbled 45% in Q4, from $124.4m a year before to $69m.

President Dennis FitzSimons forecast that retail and national advertising would fall in Q1 2002 compared to the same period twelve months before, but would be up on the fourth quarter. Classified ads are expected to be 20% down this quarter (about the same year-on-year fall as Q4), while automotive and real estate advertising will, it is thought, be up in the first quarter compared with Q1 2001.

The third of the trio, E W Scripps (owner of over twenty papers plus TV and web interests), said Q4 earnings before one-time items tumbled 24% to $41.4m, down from $54.7m a year before.

A fourth group, Knight Ridder – publisher of Newsweek and the Washington Post – is due to unveil fourth-quarter results today (Friday).

News sources: New York Times; BrandRepublic (UK)