McClatchy Co. Posts $2M First Quarter Loss
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SACRAMENTO, Calif. (AP) — McClatchy Co., publisher of The Sacramento (Calif.) Bee, The Miami Herald and other newspapers, said Tuesday that it had a net loss in the first quarter as advertising revenue declined faster.
McClatchy had warned that advertising spending was weak in January. That trend held through the quarter: Ad revenue fell 11 percent from a year ago, compared with a 7 percent decline in the fourth quarter.
The newspaper industry is reeling from a decline in advertising that doesn’t seem to be slowing as the overall economy recovers. Gannett Co., the largest U.S. newspaper publisher, and The New York Times Co. both reported first-quarter declines in newspaper advertising revenue that were steeper than in previous quarters.
McClatchy shares fell 37 cents, or more than 10 percent, to $3.18 in midday trading Tuesday.
McClatchy has been among the hardest-hit publishers, partly because The Miami Herald and The Sacramento Bee are in markets where the downturn in housing prices has been sharp.
Print ad revenue accounts for about 60 percent of the company’s total revenue and fell 14 percent in the quarter to $180 million. Online advertising failed to make up for it, growing only 2.2 percent to $45 million.
McClatchy said it lost $2 million, or 2 cents per share, in the quarter that ended March 27. That compares with net income of $2.2 million, or 3 cents per share, in the same quarter a year ago.
Several one-time items, including severance charges, a tax settlement and the sale of real estate, reduced the latest loss by a net $1.4 million.
Excluding those items, the loss would have amounted to 4 cents per share. The average estimate of three analysts polled by FactSet was for a loss of 10 cents per share.
Last year’s results were boosted by the reduction of a reserve for potential obligations related to the sale of some newspapers sold in years past. Without them, it would have posted a loss of $2 million, or 2 cents per share.
Revenue fell 9.5 percent to $304 million, from $336 million.
(Copyright 2011 by The Associated Press. All Rights Reserved.)