Lee Enterprises' earnings slip in 1Q
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By Jennifer DeWitt | Wednesday, January 23, 2008 |
Davenport-based publisher Lee Enterprises reported first-quarter earnings fell 17 percent from a year ago amid a decline in ad revenues and one fewer Sunday in the quarter.
Lee, the parent company of the Quad-City Times and 49 other daily newspapers, reported Tuesday that net income fell to $22.1 million in the quarter that ended in December. That compared with $26.65 million a year ago.
The company said diluted earnings per common share were 48 cents, which compared with 58 cents a year ago in a quarter that had the benefit of an additional publishing day — a Sunday — as well as the World Series in St. Louis, where Lee owns the St. Louis Post-Dispatch. The additional Sunday and expanded World Series coverage resulted in an estimated $7 million of revenue and $4 million of operating cash flow.
The prior year also benefited from an additional publishing week in Lee’s Tucson, Ariz., market.
Analysts polled by Thomson Financial had expected earnings of 52 cents per share on sales of $293.2 million.
In trading Tuesday, Lee’s shares closed at a new low of $9.97, which was down 6.65 percent, or 71 cents. In the past year Lee’s shares have traded as high as $35.65.
“We believe we’re weathering the current economic slowdown as well as possible in light of the wide-ranging impact of the real estate slump,” said Mary Junck, Lee chairman and chief executive officer. “Our audiences continue to grow, and we continue to focus on our top priorities of revenue growth, online innovation, strong local news, people development and cost control.”
In its earnings report, Lee said total operating revenue from continuing operations decreased 6.2 percent to $279.9 million from $298.4 million a year ago. Total advertising revenue decreased 6.5 percent to $217.6 million from $232.5 million, with online advertising revenue up 24 percent.
Combined print and online retail advertising decreased 2.5 percent. Combined print and online classified advertising revenue decreased 9.5 percent, with employment down 7.9 percent, automotive down 9.5 percent and real estate down 19.8 percent. National advertising revenue decreased 24.1 percent.
Circulation revenue decreased 4.3 percent to $49.8 million from $52 million a year ago.
“We believe we have the right strategies and the right people to continue building on our positions as, by far, the leading provider of local news, information and advertising in our markets,” Junck said.
Operating expenses decreased 4.9 percent in the quarter with compensation down 3.6 percent, newsprint and ink down 18.8 percent and other cash costs down 1.1 percent. Same property operating expenses decreased 4.3 percent for the quarter compared to a year ago, with compensation down 1.9 percent, newsprint and ink down 19.4 percent and other cash costs down 1.2 percent.
Operating cash flow decreased 10 percent to $72.4 million in the first quarter. Operating income decreased 15.8 percent to $53.7 million.
Earlier this month, Lee announced that its board of directors authorized the purchase of up to $30 million of stock on the open market or through privately negotiated transactions.
In addition to its 50 daily newspapers and rapidly growing online sites, Lee has a joint interest in five other newspapers. Lee owns more than 300 weekly newspapers and specialty publications in 23 states. Its newspapers have a circulation of 1.6 million daily and 1.9 million Sunday, reaching more than 4 million readers daily.
Lee’s online sites attract nearly 12 million unique visitors monthly, and its weekly publications are distributed to more than 4.5 million households.
Jennifer DeWitt can be contacted at (563) 383-2318 or jdewitt@qctimes.com. Comment on this story at qctimes.com.
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