Knight Ridder reports higher-than-expected earnings

SAN JOSE, Calif. (AP) — Knight Ridder, the nation's second-largest newspaper publisher, reported higher-than-expected earnings for the third quarter. 
Knight Ridder's net earnings jumped 22 percent to $69.1 million, or 85 cents per share, for the period compared with $56.5 million, or 67 cents per share, in the third quarter of 2002. 

Results from the quarter a year ago were depressed by a charge related to its stake in a recruitment advertising business. Without the $18 million charge, earnings would have been 81 cents per share a year ago. 

The results were slightly better than the company had forecast in mid-August, which chairman and CEO Tony Ridder attributed to better-than-anticipated results in September and a lower tax rate. The results were also ahead of the 81 cents expected by analysts surveyed by Thomson First Call. 

Despite the higher per-share earnings figures versus last year, the company's operating income fell 10 percent to $129 million. Ridder said the divergence was due to higher returns from investments in newsprint mills; higher results from CareerBuilder, the recruitment business; and fewer shares outstanding compared to a year ago. 

The $18 million charge in the year-ago quarter was associated with converting CareerBuilder to a limited-liability company from a C corporation. Knight Ridder's chief financial officer Gary Effren said the company has begun to realize the tax savings from the change. 

Revenue fell 1 percent in the quarter to $685.3 million from $689 million a year ago, while advertising revenue fell 1 percent to $525.9 million from $532.5 million. 

Knight Ridder publishes 31 daily newspapers, including the San Jose Mercury News, The Miami Herald and The Philadelphia Inquirer. 

For the first nine months of the year, net earnings were $197 million, or $2.41 a share, versus $160.8 million, or $1.89 per share, a year earlier. Nine-month revenues were essentially flat at $2.08 billion.