Lee Enterprises news co. 3Q profit falls 87 pct

The Davenport, Iowa-based company said net income was $2.8 million, or 6 cents per share, for the three months ended June 29, compared with $22.5 million, or 49 cents per share, in the same period last year.

Excluding the one-time charges--which included goodwill and other charges based on the falling value of its assets, including an investment in Arizona-based newspaper chain TNI Partners--earnings dropped 44.1 percent to $12.6 million, or 28 cents per share.

Goodwill is listed under assets on a company's balance sheets and reflects the implied value of an intangible asset, such as a brand or intellectual property. Shares in newspaper companies have tumbled the past year, reducing their value.

Total revenue, at $256.4 million, was down 8.3 percent from the same period last year, when it was 279.5 million.

Print and online advertising revenue combined fell 10 percent to $195.5 million for continuing operations, including a 10.1 percent drop in print ad revenue to $180.8 million and a 9.1 percent drop in online ad revenue to $14.7 million. Circulation revenue decreased more slowly, at 2.7 percent.

Classified employment advertising, which fell 28.4 percent to $15.1 million, was the hardest-hit ad category, a company report said. Retail ad sales, which fell 4.5 percent to $106.7 million, were the strongest category. National ads fell 21.7 percent to $9 million.

Operating expenses, excluding depreciation and amortization and unusual items, decreased 2.3 percent to $202.1 million, with compensation down 3 percent, newsprint and ink down slightly and other cash costs down 2.1 percent.

The company expects business conditions to improve with the economy, though they deteriorated through the quarter.

Meanwhile, it plans to cut costs with a staff reorganization, narrower page widths, other newsprint conservation programs and other measures.