Lee, Journal Have Smaller Declines in 1Q

There was more relatively good news for newspapers this week, with the first revenue reports for 2010 showing smaller year-over-year decreases than in previous quarters at Lee Enterprises and Journal Communications.

Executives at both companies expressed optimism about 2010, pointing to increased profitability, thanks to earlier austerity measures. They also noted that online advertising has finally rebounded, after almost a year of discouraging declines.

Lee Enterprises said total revenues declined 6.6% from $198.7 million in the first quarter of 2009 to $185.7 million in the first quarter of 2010. This was due mostly to a 7.7% drop in combined online and print advertising, to $130.6 million.

The national and retail categories were both down 6.4%, while classifieds slipped 10.2%, with automotive dropping 11.9%, real estate 17.7% and employment down 16.5%. Considered separately, Lee's online revenues increased 14.1% to $11.3 million. While any growth is welcome, this still represents just 8.7% of total advertising revenues.

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Total revenues at Journal Communications, including both print and broadcast properties, decreased 3% from $101.5 million in the first quarter of 2009 to $98.5 million in the first quarter of 2010.

This was attributable entirely to a 7.4% slump in publishing revenue, which fell from $48.1 million to $44.6 million. The publishing loss was partially offset by broadcast, which rose 8.6% from $39.2 million to $42.6 million. Journal also saw revenues decrease at its printing services division, reflecting the continuing underlying weakness in print media in general.

By advertising categories, Journal's publishing division saw ad revenues decrease 13.7% in classifieds and 9% in retail. On a more positive note, interactive revenues increased 20% to $2.3 million; however, this still represents just 5% of the publishing division's total revenues.

Presuming the results from Lee and Journal (and earlier results posted by Gannett) are indicative of the fortunes of the newspaper business in general, the first quarter will be the 15th straight quarter of ad revenue declines for the medium.

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