NEW YORK - Newspaper publisher Lee Enterprises Inc. said Thursday its fiscal third-quarter profit fell 87.4 percent, partly on one-time impairment charges.
The Davenport, Iowa-based company said net income was $2.8 million, or 6 cents per share, for the three months ended June 29, compared with $22.5 million, or 49 cents per share, in the same period last year.
Excluding the one-time charges _ which included goodwill and other charges based on the falling value of its assets, including an investment in Arizona-based newspaper chain TNI Partners _ earnings dropped 44.1 percent to $12.6 million, or 28 cents per share.
Goodwill is listed under assets on a company's balance sheets and reflects the implied value of an intangible asset, such as a brand or intellectual property. Shares in newspaper companies have tumbled the past year, reducing their value.
Economic conditions continued to deteriorate through the quarter, resulting in reduced advertising spending.
Print advertising revenue declined 8.2 percent, and online advertising revenue increased 5.3 percent.
Classified employment advertising, which fell 28.4 percent to $15.1 million, was the hardest-hit ad category, a company report said. Retail ad sales, which fell 4.5 percent to $106.7 million, were the strongest category.
Operating expenses, excluding depreciation and amortization and unusual items, decreased 2.3 percent to $202.1 million, with compensation down 3 percent, newsprint and ink down slightly and other cash costs down 2.1 percent.
The company expects conditions to improve with the economy. In the meantime, it is planning rigorous cost reductions through staff reorganizations, narrower page widths, other newsprint conservation programs and other measures.
Lee Enterprises said that its audience continues to grow as it reaches more than 70 percent of the adults in its market.
Shares fell 94 cents, or 22.8 percent, to $3.18 in morning trading.
A service of the Associated Press(AP)
