Knight-Ridder (KRI) Friday beat Wall Street's third-quarter earnings expectations, thanks to steady ad revenue growth for the nationwide newspaper publisher.
Knight-Ridder shares were off 13/16 at 57 7/16 in a down market.
Net income for Knight-Ridder's third quarter rose 34% to $76.2 million, or 78 cents a diluted share, from $56.9 million, or 58 cents a share, a year ago. Thirteen analysts polled by
First Call/Thomson Financial
had projected Knight-Ridder, which publishes 31 daily newspapers and is branching into other publishing sectors, would earn 74 cents a share.
Revenue rose to $784.7 million for the third quarter from $752.7 million in the comparable 1998 quarter.
Boosting Knight-Ridder's quarterly results was advertising growth in several markets, in particular San Jose, Calif., Fort Worth, Texas, and Charlotte, N.C., while Kansas City, Miami and Detroit also showed improvement when compared to the second quarter, Knight-Ridder said.
"They are pretty much a pure newspaper company and their ad rate seemed to multiply," said Douglas M. Arthur, an analyst with
Morgan Stanley Dean Witter
who gives Knight-Ridder an outperform rating and whose firm hasn't done recent underwriting for Knight-Ridder. He added that Knight-Ridder's circulation revenue, like that of newspapers across the country, improved over the second quarter, although the figures were down slightly from a year ago.
Tony Ridder, Knight-Ridder's chairman and chief executive, said his company's new online regional hubs, which opened in August, have given it a strategic position for the future. Already, the company has 22 sites, with more expected later this year, Ridder said.
Arthur of Morgan Stanley warned that Knight-Ridder faces increasing newsprint costs in the fourth quarter, but Ridder said his company has prepared for increases "with other cost controls firmly in place." By doing so, Ridder said he foresees a good fourth quarter.
"We remain confident that we will meet earnings expectations," Ridder said.
Analysts polled by First Call project Knight-Ridder will earn $1.01 a share for the fourth quarter.