NEW YORK, April 17 (Reuters) - Knight Ridder Inc., the newspaper publisher being acquired by McClatchy Co. said on Monday first-quarter earnings fell 53 percent as stock-based compensation and sale-related expenses undercut profits.
Net profit fell to $28.4 million, or 42 cents a share, from $60.5 million, or 79 cents a share, a year earlier.
Stock-based compensation depressed first-quarter earnings by 5 cents per share, and sales-related expenses knocked 6 cents off the bottom line.
A 12 percent decline in national ad revenue also dragged on earnings.
Analysts, on average, expected the company to earn 59 cents a share, according to Reuters Estimates.
Operating revenue rose 4 percent to $740 million.
"The quarter was challenging," Tony Ridder, chief executive officer of Knight Ridder, said in a statement. "With total ad revenue up only 1 percent, and with the persistence of the soft revenue patterns across the industry for many months now (employment and real estate excepted), we continue to look to the second half for improvement."
McClatchy agreed in March to buy Knight Ridder for about $4.5 billion and would become the second largest U.S. newspaper chain.
McClatchy has said it plans to sell off 12 of its slower-growth newspapers, including the Akron Beacon Journal and San Jose Mercury News.
Shares of Knight Ridder fell 15 cents to $61.70 in early trading on the New York Stock Exchange.
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