McClatchy Turnaround Continues; Online Revenues Grow

(MoneyWatch)  The management of the McClatchy Company continues to do whatever it takes to navigate through the recession. The third-largest U.S. newspaper company reported net operating income of $23.6 million in Q-3, up dramatically from $4.2 million for the same period a year earlier.

This, despite a 23.1 percent drop in revenues ($347.4 million) for the quarter from Q-3 '08. The industry-wide downturn in advertising revenue accounted for that drop, of course, but circulation revenue ticked upward by 6.7 percent.

The most impressive aspect of McClatchy's turnaround is its online operations, where advertising increased 3.1 percent in Q-3 and now accounts for 17.6 percent of the company's total advertising revenue, up from 12.2 percent a year earlier.

"Our transition to a successful hybrid print and online company continues to advance," Chair and CEO Gary Pruitt said in a statement released with the 8-K filing with the SEC. "Our online audiences are growing strongly. Average monthly unique visitors to our websites were up 14.7 percent in the third quarter and were up 23.4 percent through the first nine months of 2009. We continue to be among the leaders in our industry in online advertising revenue performance and online advertising as a percentage of total advertising."

Pruitt also noted: "The declines in print advertising are undeniably challenging for our company, and the resulting restructuring of our business has been necessary to align expenses with these new revenue realities. While painful, this restructuring is clearly contributing to our ability to manage the company through this downturn by enabling us to grow cash flow in the third quarter and reduce debt."

McClatchy has come a long way since last February, when the NYSE informed the company that it no longer qualified for listing. Under new, more relaxed rules that the SEC announced last month, a company like McClatchy can now continue to qualify for listing as long as its stock price maintained an average closing price above $1.00 per share for any consecutive, 30-trading-day period.

Lately, McClatchy has been doing considerably better than that, trading currently in the range of $3.50/share.