McClatchy profit is down sharply
McClatchy Co., one of the nation’s biggest newspaper companies, reported sharply lower profit and revenue for its third quarter and said it would take an accounting charge to reflect the poor conditions in the newspaper business and its falling share price.
McClatchy said it was still determining how big the charge would be and expected to disclose it in the company’s quarterly regulatory filing on or before Nov. 9.
The announcement reflects the deepening malaise in the newspaper business, which has seen advertising slump badly as marketers and readers continue to migrate to the Internet, and amid a long-term decline in circulation. The housing slump has also affected real estate advertising at newspapers.
Before accounting for the charge, McClatchy reported preliminary earnings of $23.5 million, or 29 cents a share, for the three-month period ended in September, down from $51.8 million, or 64 cents, a year earlier.
The latest results included a charge of 3 cents a share for special tax provisions.
Analysts polled by Thomson Financial were expecting earnings of 31 cents a share. Those estimates normally excluded one-time charges.
McClatchy’s shares fell 25 cents, or 1.3%, to $18.92. The shares have been declining steadily over the last two years and are down from $39 a share in late June 2006, when McClatchy completed its acquisition of Knight Ridder Inc.
McClatchy’s revenue fell 9.2% in the quarter to $540.3 million. Advertising revenue fell 9.8%, and circulation revenue fell 3.7%.
McClatchy Chief Executive Gary Pruitt said he expected the declines in advertising to continue in the fourth quarter. Pruitt said the company’s newspapers in California and Florida had been hurt disproportionally by the housing downturn in those markets, which in turn affects real estate advertising.
McClatchy, based in Sacramento, is the third-largest newspaper publisher in the country by circulation, after Gannett Co. and Tribune Co. Its newspapers include the Miami Herald, the Charlotte Observer and the Sacramento Bee.
