E.W. Scripps newspaper segment profit plunged 88 percent in first quarter to $2.9 million on a severe downturn in advertising revenue, the Cincinnati-based company reported this morning.
The year-over-year results are for newspapers managed solely by Scripps.
Newspaper revenue dropped 21.7 percent to $2.4 million while advertising revenue declined almost 30 percent to $85.8 million.
Local advertising revenue was down almost 25 percent to $26.6 million. National fell 25.7 percent to $6 million. Classified revenue skidded 37.7 percent to $26.6 million. Preprint revenue was down almost 20 percent to $19.3 million.
Online revenue plummeted 26.5 percent to $7.3 million because of the weakness in print classified advertising, which accounts for 55 percent of online advertising revenue. Stripping out online ads tied to print, Scripps reported that online revenue from “pure-play” advertisers was up 30 percent to $3.4 million.
Circulation revenue was at $30.6 million for the quarter, a slight uptick compared to the same quarter a year ago.
“In the first quarter we made a series of tough decisions intended to improve our financial position through the current economic downturn and beyond into what we believe will be a restructured environment for local media,” Rich Boehne, president and CEO of Scripps, said in a statement. “The most difficult decision, but also the one that eliminated significant financial risk, was the shutdown of the Rocky Mountain News in Denver.”
Boehne said that operating losses and expenses related to the closure as well as Albuquerque at $13.3 million were confined to Q1. That said, he noted that the second quarter is shaping up to look like Q1.
Cash expenses for the newspaper segment were down 8.6 percent to $119 million.
Overall for Scripps, which also operates television stations and a licensing and syndication business, consolidated revenue decreased 20 percent to $205 million. The loss from continuing operations, net tax, was $221 million or $4.12 per share compared with income from continuing operations in Q1 2008 of $8.6 million or 16 cents per share.
Excluding one time items, such as a $192 million write down of the value of its TV stations, the net loss from continuing operations was 24 cents per share.
At the end of the Q1, Scripps held $73.1 million in long-term debt.
“Despite all we’ve done to reduce expenses during these difficult days, we have not done so indiscriminately,” Boehne said in a statement adding the company suspended its 401K match, reduced salaries, and froze its pension plan. “Today our low debt is a competitive advantage, allowing us to leverage our investments in local news and information content.”