McClatchy Widens Q1 Loss

The McClatchy Co. Thursday reported a first-quarter loss that exceeded expectations on newspaper advertising revenue that plunged 29.5 percent.
McClatchy reported a loss of $37.7 million, or 45 cents a share, from a loss of $993,000, or 1 cent a share, in the first quarter of 2008. Adjusted for certain items, such as severance payments from a wave of layoffs, the loss from continuing operations was $22.9 million, or 28 cents a share. The consensus of analysts had been for an 11-cent loss per share.
Overall revenue from continuing operations in the first quarter of 2009 was $365.6 million, down 25.1 percent from the first quarter of 2008.
Advertising revenue was $284.7 million–down 29.5 percent from the year-ago period.
Classified advertising revenue plummeted 41.8 percent on big declines in the three major categories of automotive, down 32.5 percent, real estate, down 44.3 percent, and employment–down a staggering 63 percent.
Digital advertising also declined in the quarter, falling 4.7 percent on a big drop in help-wanted ads. Excluding employment advertising, McClatchy said, digital revenue increased by 28.7 percent.
Digital advertising revenue accounted for 15.3 percent of total ad revenue, up from 11.6 percent for all of 2008, McClatchy said.
McClatchy said its circulation revenue ticked up 0.9 percent to $68.5 million.
“To help offset the impact of declining advertising revenues, we implemented a number of circulation and cost-related initiatives,” McClatchy chairman and CEO Gary Pruitt said. “We have increased circulation prices at a number of our newspapers over the last several months which resulted in circulation revenue growth of 0.9 percent.”
Pruitt noted that cash expenses decreased 18 percent for the quarter, and newsprint prices fell with each month of the quarter.
“The economic environment is still weak and, like everyone else, our visibility on advertising trends is limited,” Pruitt added. “So far April’s revenues are similar to the first quarter. We will remain focused on realigning our cost structure as we continue transitioning our business to a hybrid print and digital media company. We remain the leading local media company in some of the best growth markets in the nation and are working hard to position the company to benefit from a stronger economy once conditions improve.”