Two major US newspaper publishers have this week reported declining profits due to fall advertising revenues and a rise in newsprint costs, according to analysts at ABN Amro.
Knight Ridder, the second largest newspaper group in the US, saw Q2 profits drop by 85%. The company, which publishes 32 daily titles including the
Miami Herald and
Philadelphia Inquirer, has already seen its first quarter revenues drop by 25% as a result of the ad downturn (see
Knight Ridder Becomes Latest Newspaper Group To Issue Profits Warning).
Meanwhile, rival publisher Gannett saw its underlying revenue growth fall by 7%, although headline growth came in at 12%. Ad revenues at the company’s flagship USA Today today fell by 19% on ad pages down 21%.
ABN Amro says that the results confirm its view that the advertising environment, both in the US and globally, is still ‘extremely weak’ with no visibility on when recovery might occur.
