Knight Acquisition Helps McClatchy Boost Earnings
McClatchy Co. said Tuesday that its acquisition of Knight Ridder Inc. helped boost third-quarter profit, but the nation’s No. 2 newspaper company warned of a continuing slump in classified and national advertising.
McClatchy, based in Sacramento, said net income rose to $51.8 million, or 64 cents a share, from $38.6 million, or 82 cents, a year earlier. The company nearly doubled its outstanding shares to 81 million this year to fund the $4.5-billion cash-and-stock acquisition of Knight Ridder in June.
Revenue grew to $680.9 million from $292.6 million last year, short of analysts’ expectations of $702.5 million, according to Reuters Estimates.
It was the first quarter that McClatchy included Knight Ridder in its results.
“As we look to the fourth quarter, we anticipate continued slowing in the overall advertising environment,” McClatchy Chief Executive Gary Pruitt said.
Falling circulation and weak print advertising have put pressure on some newspaper publishers to consider strategic options, such as going private or selling assets.
Pruitt told analysts that McClatchy would remain a public company for now. Several analysts have said that going private is an attractive option for publishers beset by investor disappointment in their stock performance.
Pruitt also said McClatchy was not interested in buying Tribune Co., which is considering options for its future.
“We’re not in the acquisition hunt right now,” he said.
McClatchy’s newspapers include the Miami Herald and the Sacramento Bee.
Shares of McClatchy fell 27 cents to $43.15.