The effects of the recession appear to have hit most sectors of the economy suddenly these past few weeks, but it's something The McClatchy Company (NYSE: MNI) and other newspaper publishers have been dealing with for some time now. But things are looking tougher, as McClatchy's Q3 net income from continuing operations came in $4.2 million, or five cents per sharehalf of what analysts polled by Thomson Reuters (NASDAQ: TRIN) expected, AP reported. The anticipation, on average, was that McClatchy would post profit of 10 cents per share on revenue. McClatchy also said revenues were down 16.4 percent to $451.6 million, which also came up short against analysts call for revs of $453.4 million.
The company has been trying to climb out of a deep hole, pointing out that in Q307, McClatchy posted an after-tax loss from continuing operations of $1.345 billion, or $16.40 per share. Last month, the publisher of the Sacramento Bee and Miami Herald announced a restructuring plan that it says will save $100 million annually. The plan included paring staffing levels down about 10 percent and is expected to result in severance of approximately $20 million. Of that amount, $17 million was recorded during Q3. Also in September, McClatchy renegotiated $1.175 billion of debt, which includes banks loans and available lines of credit, giving it a bit more flexibility, at least for the time being. Total debt was $2.07 billion as of September 28. Other highlights from Q3 included:
-- Online ad revenues grew 9 percent. Online made up 12.2 percent of total ad revenues, compared to 8.6 percent of total advertising revenues for all of 2007. Excluding employment ads, online ad revs were up 49.3, as the category that has been impacted both online and in print by the nation-wide decline in jobs.
-- Gary Pruitt, chairman and CEO, in a statement: "Our online business continues to be a bright spot for the company; online audiences and revenues are growing strongly. In the third quarter, average monthly unique visitors to our websites were up 43.8 percent and were up 37.1 percent through the first nine months of 2008 More than half of our online advertising came from ads placed only online; they were not tied to a print up-sell."
By David Kaplan