Citing a "horrible economy" amid newspapers' "transitional period," The McClatchy Company (NYSE: MNI) swung to a net loss of $21.7 million ($0.26 cents a share). The Sacramento company posted a pre-tax non-cash impairment charge of $59.6 million "to newspaper mastheads." Trying to stanch the bleeding, McClatchy also said it was undertaking yet another cost-cutting plan. The latest initiative promises to reduce costs by an additional $100 million to $110 million, or approximately seven percent of 2008 cash expenses.
Revenues: What the company didn't announce was a plan to stabilize its revenue declines. McClatchy's Q4 revs were $470.9 million, down 17.9 percent last year's $573.4 million. Advertising revenues were $388.3 million, down 20.7% from 2007, and circulation revenues were $67.0 million, up 1.4 percent.
Online ad revenues grew 10.3 percent in the quarter. Web dollars represented 10.9 percent of total advertising revenues compared to 7.8 percent of total advertising revenues in the fourth quarter of 2007. In a show of how newspapers' reliance on quickly evaporating classified advertising has hurt the online side as well, McClatchy CEO and chairman Gary Pruitt noted in a statement that website ads would have been up were up 47.3 percent if job ads weren't included in the Q4 results.More to come
Full Year '08: Net income from continuing operations for fiscal 2008 was $2.8 million ($0.3 per share) and was affected by the impact of the non-cash impairment charges. Revenues from continuing operations in 2008 were $1.9 billion, down 15.9 percent compared to $2.26 billion in 2007. Ad revs in '08 totaled $1.6 billion, down 17.9 percent and circ dollars were $265.6 million, down 3.7 percent. Online advertising revenues grew 10.6 percent in 2008 and represented 11.6 percent of total ad sales compared to 8.6 percent for all of 2007.
By David Kaplan