McClatchy Posts Lower 3Q, Plans Charge (Dinosaur Media DeathWatch™)

AP ^ | October 16 2007 | Seth Sutel

[Milhous]

McClatchy 3Q Profit Falls, Plans to Take Charge Due to Poor Conditions for Newspaper Business

McClatchy said it was still determining how big the charge would be, and expected to disclose it in the company's quarterly regulatory filing on or before Nov. 9.

The announcement reflects the deepening malaise in the newspaper business, which has seen advertising slump badly as marketers and readers continue to migrate to the Internet, and amid a long-term decline in circulation. The housing slump has also affected real estate advertising at newspapers.

Before accounting for the charge, McClatchy reported preliminary earnings of $23.5 million, or 29 cents per share, for the three-month period ending in September, down from $51.8 million, or 64 cents per share, a year ago.

The latest results included a charge of 3 cents per share for special tax provisions.

Analysts polled by Thomson Financial were expecting earnings of 31 cents per share. Those estimates normally excluded one-time charges.

McClatchy's shares fell 25 cents, or 1.3 percent, to close at $18.92 Tuesday after trading at a 52-week low of $18.50 earlier. The shares have been declining steadily over the past two years, and are down from $39 a share in late June of 2006, when McClatchy completed its acquisition of Knight Ridder Inc.

McClatchy's revenue fell 9.2 percent in the quarter to $540.3 million versus $595.1 million in the same period in 2006. Advertising revenues fell 9.8 percent, while circulation revenues fell 3.7 percent.

In prepared remarks, McClatchy CEO Gary Pruitt said he expected the declines in advertising to continue in the fourth quarter. Pruitt said the company's newspapers in California and Florida have been disproportionally hurt by the housing downturn in those markets, which in turn affects real estate advertising.

Pruitt said the company believes that cyclical factors represent "a significant portion" of the advertising downturn. Pruitt said the tough environment for newspaper and the company's declining stock price led it to move up its annual test of goodwill impairment, or the book value of a company's assets, from the usual time of year-end, resulting in the third-quarter charge.

Pruitt said the company's outlook for the fourth quarter has been "tempered" by poor conditions in the housing market, particularly in California and Florida, where it has significant newspaper holdings. As a result, he said, the company expects similar declines in advertising revenues in the fourth quarter as it saw in the third and second quarters.

McClatchy, based in Sacramento, Calif., is the third-largest newspaper publisher in the country by circulation, after Gannett Co. and Tribune Co. Its newspapers include The Miami Herald, The Charlotte Observer, and The Sacramento Bee.

[Milhous]

ping

[Man50D]

and readers continue to migrate to the Internet,

They don't bother to explain the reason people are migrating to the Internet is due to readers being tired of the socialist propaganda in the newspapers.

[RKV]

All I can say, is that based on my experience growing up with a McClatchy paper (the Fresno Bee), bankruptcy can’t happen soon enough. Put these idiots out of work and let’s get on to another media that will actually do a job for their money.

[Enterprise]

Ditto!

[Milhous]

Editor & Publisher's tale tries to pin the blame on that mean old housing slump for creating fishwrap malaise.

NEW YORK McClatchy Co., one of the nation's biggest newspaper companies, reported sharply lower profit and revenue for its third quarter Tuesday and said it would take an accounting charge to reflect the poor conditions in the newspaper business and its falling share price.

McClatchy said it was still determining what size that charge would be, and expected to disclose it in the company's quarterly regulatory filing on or before Nov. 9.

The announcement reflects the deepening malaise in the newspaper business, which has seen advertising slump badly as marketers and readers continue to migrate to the Internet, and amid a long-term decline in circulation. The housing slump has also affected real estate advertising at newspapers.

(excerpt)

[Vicki]

My husband and I both used to work for a McClatchey paper. We had a friend leave McClatchey less than 2 weeks ago. He kept trying to tell them what they needed to do as far as integrating the newspaper industry with today's technology, but they didn't want to hear it.

When he left, he told them he wasn't going to wait around while they slowly go under. I believe they have it good for so long, that until it is truly over, they are not going to believe it it is happening. On top of that they are an arrogant bunch of liberal snobs.

[TenthAmendmentChampion]

The article implies that readers are flocking to the Internet to read the same propaganda. They might read an article or two, but most of the news they get from other sites. I read maybe an article a month on the Fresno Bee site... and that’s only because my husband insists on having it as his home page. Otherwise... FR and LGF are my main sources for news. Oh and occasionally good old Drudge.