McClatchy says 3Q earnings lower, ad revenue down

AP News
Posted: Oct 21, 2011 4:48 PM
McClatchy says 3Q earnings lower, ad revenue down

A slump in advertising showed no signs of easing for McClatchy Co. in its latest quarter.

The newspaper publisher cut expenses, partly through layoffs this year, but advertising and circulation revenue declined.

The economic downturn has exacerbated the newspaper industry's challenges making money off the Internet as print readership and ad dollars shrink. McClatchy has suffered more than some of its peers because two of its largest newspapers, The Miami Herald and The Sacramento Bee in California, are in markets that have been especially hit hard by a downturn in real estate. This, along with weak auto sales, has hurt advertising.

McClatchy earned $9.4 million, or 11 cents per share, in the quarter that ended Sept. 25. That's down 21 percent from $11.9 million, or 14 cents per share, a year earlier. Revenue fell 8 percent to $300 million from $328 million.

Advertising revenue declined 10 percent. Earlier this week, The New York Times Co. and USA Today publisher Gannett Co. reported smaller drops in third-quarter ad revenue.

McClatchy's circulation revenue fell 3 percent. Daily newspaper circulation declined 4 percent, but Sunday circulation grew 2 percent, the company said, adding that Sunday circulation drives more advertising revenue than any other day of the week.

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Digital advertising revenue fell slightly _ less than half of a percent _ but that's because the company bundles some digital ads with print ads. Standalone digital revenue increased 9 percent. Digital advertising now represents 21 percent of McClatchy's total advertising revenue, up from 19 percent in the third quarter of 2010.

Shares of McClatchy, which is based in Sacramento, Calif., rose 8 cents, or 5 percent, to close at $1.63 Friday. The stock has lost nearly two-thirds of its value since the start of the year.