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Knight Ridder chops jobs
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June 18, 2001: 3:18 p.m. ET
Newspaper publisher slashing 1,700; remains comfortable with forecasts
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NEW YORK (CNNfn) - Knight Ridder Inc. said Monday it is cutting an additional 1,700 jobs and that it remains comfortable with Wall Street earnings estimates for the current quarter and fiscal year.
The San Francisco-based publisher of the San Jose Mercury News, Miami Herald and Philadelphia Inquirer will take a $75 million charge in the quarter for these moves, which are part of a broader restructuring program, CEO Tony Ridder told analysts at the newspaper industry's annual Mid-Year Media Review conference. The job cuts are in addition to previously announced cuts of 400 jobs.
The restructuring charges are not included in Wall Street consensus forecast for the second quarter and full year, the company said.
Nevertheless, Knight Ridder said it remains comfortable with analysts' estimates of 71 cents a share earnings for the quarter and $3.28 a share for the full year, according to earnings tracker First Call.
The announcement comes as newspaper publishers, including Knight Ridder, and other multimedia companies are struggling with weak advertising sales as companies trim their advertising spending in order to cope with the slowing economy.
Knight Ridder (KRI: up $0.61 to $56.81, Research, Estimates) said earlier in the day that its second-quarter operating revenue was down 8.8 percent from a year ago due to declining industry-wide advertising sales.
Ridder said the current "revenue environment" could delay the company's goal of achieving margins in the mid 20 percent range set last December. H also said labor and employee benefit costs should be down to the mid- single digits in 2001 and that other operating costs similarly will fall.
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Steve Rossi, president of Knight Ridder's newspaper division, said retail advertising increased 1. percent for the first five months of 2001, but that general advertising was down 4.4 percent and classified ads were down 11.6 percent. Auto ads were down 4 percent in the first half and help-wanted ads were down 25.7 percent. Real estate ads increased 22.6 percent.
Rossi said the company's newspaper division is taking steps to pump up sales such as adding sales staff in spite of the job cuts, expanding pre-print distribution, capitalizing on national growth, toughening performance criteria, and developing "vertical" business that combines the power of both print and online exposure.
Knight Ridder anticipates $800 million in operating cash flow for the fiscal year and net free cash flow after dividends and capital expenditures of about $325 million. That figure excludes severance costs. 
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Knight Ridder
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