Wednesday, October 20, 2010

McClatchy Reports Lower Third Quarter Profits in 2010

The McClatchy Co. on Tuesday reported lower third quarter profits, although the newspaper company said its lengthy slump in advertising revenue continued to show signs of easing, writes Dale Kasler of the McClatchy News Service from Sacramento, Calif.

Sacramento-based McClatchy, owner of The Miami Herald and el Nuevo Herald, said bottom line net income fell to $11.9 million or 14 cents a share, down from last year's $23.6 million or 28 cents. Excluding certain adjustments, earnings from operations fell to $10.6 million from $11 million.

Advertising revenue, which makes up the bulk of the company's business, fell 6.4 percent from a year earlier. That represented a slight improvement from the second quarter, when sales were off 8 percent -- and a major improvement from a year ago, when ad revenue was falling 30 percent.

But in a troubling sign, Chairman and Chief Executive Gary Pruitt said results from September were a setback. ``We have seen improving ad revenues since the second quarter of 2009 although September went against this trend,'' he said in a news release. ``We believe the September results reflect the uneven nature of the economic recovery. ... The declines were greatest at our California and Florida newspapers, where the rate of economic recovery continues to be slower than we are seeing elsewhere.''

The Sacramento Bee and a handful of other McClatchy papers imposed layoffs earlier this month after McClatchy executives said business had softened considerably in recent weeks. The layoffs were considerably smaller than cutbacks made last year.

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