Continued reductions in advertising revenue contributed to an 86 percent decline in third-quarter profits at The Washington Post Co. and widened losses at the Belo newspaper chain, the companies said Friday.
The prospects for reduced cash flows also prompted the Post company to take an accounting charge on its smaller papers.
The Post company, whose properties also include Newsweek magazine and the Kaplan academic testing service, said earnings slid to $10.1 million, or $1.08 per share, from $72.2 million, or $7.60 per share, in the year-ago quarter.
The company's newspapers have suffered — like all other papers across the country — from declining ad revenue because of the migration of readers to the Internet and a weakening economy that has depressed consumer and ad spending.
Although the ad decline affects all papers, its effect on the intangible accounting value depends partly on when a company buys an asset and what it paid. The company took a $59.7 million charge to adjust for the reduced value of The Daily Herald of Everett, Wash., and its community newspapers division, which includes The Gazette, other weeklies in Maryland and military publications.
Shares in the Washington-based Post increased $31.80, or 8.1 percent, to close at $426.80, while shares in Dallas-based A.H. Belo Corp. increased 49 cents, or 17.4 percent, to $3.31.
Belo reported a net third-quarter loss of $17.3 million, or 84 cents per share, nearly three times the loss of $6.3 million, or 31 cents per share, in the year-ago period. The company took a charge of $11.1 million to pay for about 400 voluntary buyouts and $4.5 million for impairment of a printing press.
The publisher of The Dallas Morning News and three other newspapers, Belo said it would take a $2.4 million fourth-quarter charge for costs related to 90 layoffs last week.
Belo's revenue slipped 15 percent to $153.8 million, from $181.9 million, as print and online ad revenue fell 22 percent combined. Internet revenue, which accounts for 7.4 percent of total revenue, fell 19 percent. Circulation revenue grew 12 percent.
At the Post company, revenue grew 10 percent to $1.13 billion from $1.02 billion, largely on improved revenue from its education and cable television segments.
The Post company gets about 53 percent of its revenue from the Kaplan business and another 16 percent from its Cable One unit, which signed up more customers for its high-speed Internet and telephone services and increased many service rates over the past year.
At the Post newspaper, print advertising revenue fell 14 percent during the quarter. The company did not provide advertising totals for its other papers.
Online revenue companywide grew 13 percent — stronger than recent quarters — but that was not enough to offset the declines in print because the Web sites make up a smaller share of overall revenue.
Ken Doctor, a media analyst at Outsell Inc., said that whether Internet revenue falls or increases partly depends on how good a company is at selling online-only ads.
"The Post is among those that is doing that well," Doctor said.
Many other newspaper companies, he said, still largely bundle Web sales with print ads, meaning the online component also suffers when print sales slow down.
The Post got a big online boost from the Nov. 4 national election in the July-September quarter.
According to comScore Inc., visitation picked up in August with the first of the two political conventions this summer and grew to nearly 8 million unique visitors in September, up 40 percent from a year earlier. The Post also expanded its online offerings with a new section called the Political Browser.
Like Gannett Co. and Media General Inc., the Post company saw revenue at its television stations grow slightly because of a boost from the Olympics and political advertising, but ad sales in other categories were generally weak.
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Associated Press Business Writer Michelle Chapman contributed to this story.
