Lee Enterprises posts 3Q profit, reversing losses as ad market improves and costs fall

Lee Enterprises posts 3Q profit as ad drop eases

DAVENPORT, Iowa — Lee Enterprises, publisher of the St. Louis Post-Dispatch and other newspapers, reported a fiscal third-quarter profit Tuesday, thanks to falling expenses and a smaller drop in revenue.

Lee is still suffering through one of the worst advertising slumps the newspaper business has ever seen. Online competition for ad dollars and a severe recession pummeled the industry last year.

But like other publishers, Lee Enterprises Inc. has seen the pace of advertising declines slow as the economy stabilizes. A year ago, Lee reported a 24 percent drop in ad revenue compared with the year before. That decline shrunk to 4.9 percent in the most recent quarter.

The improving ad market helped Lee earn $10 million, or 22 cents per share, reversing a year-earlier loss of $24.5 million, or 55 cents per share.

Stripping out one-time costs, earnings rose to 26 cents per share, from 12 cents.

Overall revenue slipped 3.6 percent to $196.4 million. The decline was mitigated by a nearly 25 percent jump in digital ad revenue, reflecting the broader shift of ad dollars to the Web.

“Our positive momentum continues in the face of a still-unsettled economy,” CEO Mary Junck said in a statement. “Although total revenue remains negative year-over-year, the rate of decline has slowed by nearly half as our digital sales initiatives gain steam rapidly.”

Lee’s expenses fell 5.7 percent, helped by a drop in newsprint, ink and compensation costs.