War Scrapes Gloss from US Newspaper Results

17 April 2003

America’s two largest newspaper publishers each posted increases in first-quarter earnings, but both warned that the war in Iraq had dented results.

Gannett, the leading newspaper firm and owner of 22 TV stations, reported a 2.6% year-on-year rise in Q1 earnings to $250 million (€231m; £159m), on a revenue rise of the same margin to $1.55 billion.

Newspaper ad income climbed 3.7% to $1.01bn, while circulation revenue was up 1.1% to $302m. Flagship title USA Today saw revenues increase just 1% as travel advertising suffered. At Gannett’s TV division, revenues slipped 5.4% to $158m, a decline that partly reflects comparison with last year’s Winter Olympics-fuelled results.

Gannett chairman, president and ceo Douglas McCorkindale professed himself happy with the increased earnings, but added that “results, particularly at our television stations and USA Today, were depressed by the reluctance of advertisers to spend in an uncertain geopolitical environment.”

It was a similar story at Knight Ridder, the second-largest publisher by circulation. According to chief financial officer Gary Effren, most ad categories increased spend in the first two months of the war. “Then, in March, with the war, total advertising revenue was down 2.3%.”

Knight Ridder’s headline earnings actually jumped 84% to $50.7m, but if a write-down made in Q1 2001 is factored out, they fell 2%. Operating revenues slipped 0.1% to $677.4m, while ad income edged up 0.3% to $521.4m.

Data sourced from: multiple sources; additional content by WARC staff