Major Papers Begin Reporting Q4, Show Healthy Ad Gains

The first look at the newspaper industry's fourth quarter has come in-and it's pretty good.

No, it's not incontrovertible evidence of the sustained recovery that many publishers have been hoping for ever since the newspaper industry fell hard into the media recession. And the newspaper industry has had false starts before, including a strong fourth quarter in 2002 that skidded a bit in 2003. But Pulitzer Inc. and Lee Enterprises both saw increases in advertising revenues in many categories for the quarter, Pulitzer's fourth, and Lee's first fiscal quarter.

Pulitzer's advertising revenues rose 5.2 percent to $114.1 million in the fourth quarter, led by a strong 5.7 percent increase in revenues in December. Several categories--including retail, national, and classified -- were up more than 5 percent for the company that publishes the St. Louis Post-Dispatch and the Arizona Daily Star in Tucson plus 12 other daily newspapers.

Retail advertising was boosted by a rise in preprints and what Pulitzer termed "general stability from major retail advertisers," which has been holding back a lot of newspaper companies. Classified as a category was up 5.6 percent, including a slight increase in help-wanted and a double-digit rise in real estate but a drop in automotive.

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Pulitzer's 2003 finished up slightly positive, with a 1.6 percent increase in total revenues aided by a 2.6 percent rise in advertising revenues to $271.84 million. Retail, national, and preprint advertising rose, while classified fell about $3 million to $122.63 million compared to 2002.

Robert C. Woodworth, president and chief executive officer of St. Louis-based Pulitzer, said Tuesday morning that the company's momentum grew month to month, with ad revenue increases in eight of the past 12 months. In a conference call with analysts following the earnings release, Woodworth and other executives were positive about how the year ended, and were looking as far into 2004 as possible. But Pulitzer--like the rest of the newspaper industry--has been here before, and they aren't willing to bet the farm on recovery, so to speak.

"We've seen encouraging signs of an improvement in advertising revenue before, only to be disappointed," Woodworth said. Still, fourth-quarter revenues were better than expected, due to strength in December.

One category where Pulitzer wants to wait and see is help wanted, which was up overall--particularly in Tucson, which is jointly owned by Pulitzer and Gannett. In St. Louis, November and December's employment advertising revenue was up for the first time in several years. But it was "more rate than volume, unfortunately," an executive said.

"The best way to describe employment is uneven," said Woodworth.

Lee Enterprises, an Iowa-based publisher of midsize newspapers, reported Tuesday that its advertising revenues rose 4.3 percent to $130.8 million in the quarter ended Dec. 31. Retail advertising continued strong, as well as Lee's first quarterly gain in help wanted revenue in three years.

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