Knight Ridder Profit Falls as Ad Sales Sag

Knight Ridder Inc., the second-biggest U.S. newspaper publisher, said third-quarter profit fell 27% on lower sales as terrorist attacks prolonged an advertising slump and raised expenses.

Net income at the San Jose-based publisher of the Philadelphia Inquirer and the Miami Herald fell to $55.7 million, or 65 cents a share, from $76.1 million, or 87 cents, a year earlier. Sales declined 9.9% to $693.1 million from $769.2 million.

Advertising sales dropped 11%, with help-wanted ads tumbling 40% from the year-earlier period. Most advertisers reduced or halted marketing for almost two weeks after the Sept. 11 attacks, Knight Ridder said.

“Last month it was planes flying into buildings, this month it’s anthrax,” Chief Executive Tony Ridder said during a conference call. “Until there’s some settling down in the country, I can’t tell you when I think this is going to start picking up.”

Knight Ridder, which publishes 32 daily papers including the San Jose Mercury News, was expected to earn 63 cents, the average estimate of analysts surveyed by Thomson Financial/First Call.

The company said it expects to meet the 2001 average earnings estimate of $2.91 a share among analysts polled by First Call.

Knight Ridder shares rose 60cents to $57.72 on the New York Stock Exchange. They’ve increased 30% in the last year. Gannett Co. is the biggest U.S. newspaper publisher.