NEW YORK US newspaper advertising slumped in the first quarter, slashing profits at Gannett Co. and The New York Times Co. and causing the first loss at Tribune Co. in five years.
Gannett, the largest US newspaper publisher and owner of USA Today, reported a 10 percent drop in net income to $210.6 million yesterday. Times Co. said profit dropped 26 percent to $23.9 million and Tribune, publisher of the Los Angeles Times, posted a $15.6 million loss.
Ad revenue fell an average of 4.5 percent across the industry during the quarter. A shift by advertisers to the Internet and a slowing real estate market reduced demand for classified ads.
The pressure is coming from the national advertising segment and classifieds, which is having a disproportionably larger impact on profit margins, said Mike Simonton, a Chicago-based credit analyst at Fitch Ratings.
McLean, Va.-based Gannett fell 71 cents to $57.60. Tribune, which agreed to be taken private this month by Sam Zell, declined 21 cents to $32.48. Richmond-based Media General fell 57 cents to $38.52.
Newspapers extended a decline from 2006, when ad revenue at 145 dailies fell 3.3 percent, according to TNS Media Intelligence.
Times Co., publisher of The New York Times and The Boston Globe, said net income fell to $23.9 million, or 17 cents a share. Sales fell 1.6 percent to $786 million.
Classified ad revenue slumped 12 percent in a period that chief executive Janet Robinson described as difficult.
New York Times and the regional properties, especially The Boston Globe, are still seeing some pretty weak numbers, said Alexia Quadrani, a New York-based analyst at Bear Stearns Cos. She rates the stock peer perform.
The results included costs of 8 cents a share from closing of a plant in Edison, N.J., and eliminating jobs.