E.W. Scripps Co., owner of the Rocky Mountain News, on Tuesday reported a 7 percent rise in first-quarter profits, but company executives criticized the financial performance of its joint business operation with The Denver Post.
“We are not at all happy with what we are seeing out there (in Denver), and we will be spending a fair amount of time and effort to address our performance,” said Joseph NeCastro, Scripps’ finance chief, during a conference call with analysts.
Officials of Denver-based ap, owner of The Denver Post, declined to comment.
Scripps and MediaNews share revenues and business expenses for the Rocky and The Post under a joint operating agreement, or JOA. The two papers maintain independent newsrooms.
Scripps’ overall profits from newspapers declined by 21 percent for the quarter, from $63.1 million during the prior-year quarter to $49.9 million.
NeCastro attributed the decline largely to higher employee and newsprint costs and weak advertising sales in three markets with joint operating agreements: Denver, Cincinnati and Albuquerque.
During the quarter, the segment that includes those partnerships reported a loss of $1 million, compared with a combined profit of $7 million a year earlier.
The Denver joint operating agreement contributed a profit of $1.17 million, down from $7.92 million during the comparable quarter in 2005.
Part of the decline in Denver came from expenses related to the construction of a new production facility in Denver that will be shared by the Rocky and The Post. Another factor was the ongoing consolidation of the two papers’ printing plants, NeCastro said.
Scripps reported a $2.1 million after-tax gain, or 1 cent per share, from the formation of a publishing partnership in Colorado with MediaNews that encompasses smaller papers owned by both companies.
Scripps, the Cincinnati-based media giant, posted strong sales in its cable-television and online- shopping services. That helped overall net income rise to $75.1 million, or 45 cents per share, for the quarter ending March 31. That compares with $70 million, or 42 cents a share, a year earlier.
Scripps shares closed Tuesday up 69 cents, or 1.5 percent, to $45.25.
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com.
