Knight Ridder: Digital Up, Profit Down

Knight Ridder reported Q1 revenues yesterday. Digital revenue was way up, almost 37% vs. last year but profit was down. Knight Ridder CFO Steve Rossi said the following about national advertising (down) and classifieds (up):

Within national, all large segments were down in the metro markets. Telecommunications, which accounts for about 28% of the category, was down 6.1%. National auto, about 11% of the category, was off 35.7%, reflecting primarily a precipitous drop in General Motors spending. Entertainment, nearly 8% of the category, declined 16.9%. Airlines were down 29.5%. Preprints declined 6.6%. The balance of the category, combined, was up 1.7%.

Classified strengthened during the quarter, up 5.5% in January, 6.0% in February and 10.7% in March. Very likely, the Easter shift from late March in 2005 to mid April in 2006 explains the relative strength this year. Easter Sunday is typically a poor day for classified.

Within the category, employment was strong throughout the quarter — up 13.3% in January, 10.4% in February and 20.5% in March. Real estate was strong also: up 15.5% in January, 21.0% in February and 29.3% in March. Auto was consistent: down 9.9% in January, 13.1% in February and 11.7% in March.

In particular, digital was a bright spot:

Two bright spots in the quarter were Knight Ridder Digital's performance, with total online revenue of $51.1 million, up 36.5%, and targeted publication revenue of $50.1 million, up 23.9%.

Knight Ridder recently agreed to be acquired by McClatchy.