Weak ad market hurts newspapers
The newspaper industry suffered more blows Wednesday as continuing declines in advertising sent profits down and led to more staff cuts.
Washington Post Co., owner of the namesake newspaper, said fourth-quarter profit fell 13%, hurt by declining print advertising sales and costs to reorganize some units in its Kaplan education group.
Net income dropped to $82.9 million, or $8.71 a share, from $95.5 million, or $9.97, a year earlier. Sales rose 8.1% to $1.13 billion.
Shares declined $2.63 to $723.37, and have fallen 6% in the last year.
In Sacramento, McClatchy Co. said sales fell 14% in January and forecast similar performance for the remainder of the quarter for its 30 daily newspapers, including the Miami Herald.
The company is experiencing the effect of “worsening economic trends,” Chief Financial Officer Pat Talamantes said Wednesday. January revenue totaled $176.8 million, as ad sales dropped 16% to $145.5 million.
Shares of McClatchy fell 25 cents to $10.12 and have slid 73% in the last year.
McClatchy has said it plans to write down the value of its newspapers, four months after it recorded a $1.4-billion non-cash goodwill charge in its third-quarter earnings. The write-down reflects the declining value of McClatchy’s newspapers since it acquired the Knight Ridder Inc. chain in June 2006.
The Newspaper Guild of Greater Philadelphia said that Philadelphia Media Holdings, which owns the two largest dailies, has cut 68 workers in advertising, circulation, customer service, finance, marketing and systems. In addition, the union said, a “very small” number of managers will be laid off.
Jay Devine, a spokesman for Philadelphia Media Holdings, said the weak advertising market forced the company to make cuts.
The company has added editorial workers and is completing a plant investment of nearly $4 million that will put more color into the papers, he said in a statement.
The company has 2,400 full-time and 1,500 part-time workers, he said.
The newspapers laid off about 100 editorial and advertising workers more than a year ago.
