By: E&P Staff
The McClatchy Co. Wednesday joined the parade of newspaper publishers reporting poor first-quarter performances, saying it suffered a narrow loss on revenues that plunged 13.8%.
For the quarter, McClatchy (NYSE: MNI) reported a net loss from continuing operations of $993,000, or 1 cent per share. In the first quarter of 2007, McClatchy reported net income from continuing operations of $14.5 million, or 18 cents per share. The quarter included a recorded a loss from discontinued operations of $5.5 million, or 7 cents per share, related to results of the Star Tribune in Minneapolis, which McClatchy sold on March 5, 2007.
Q1 total revenues fell 13.8% to $488.3 million.
Advertising revenues plunged 15.3% to $404 million, on big declines in classified advertising especially at its California and Florida papers.
California and Florida accounted for fully 56% of the chain’s ad revenue decline said Chairman and CEO Gary Pruitt.
McClatchy reported double-digit declines in advertising revenue in every region where it publishes, but the results were particularly poor in California, which was down 23.1% for the quarter, and Florida, which was down 23.7%.
Overall classified revenue was down 25.7%, with real estate plunging 35.8%, help-wanted tumbling 33.4%, and automotive off 16.1%.
Retail advertising also fell in the quarter, down 7.5%. National advertising was off 15.3%.
McClatchy said its online ad revenue grew 10.6% in the quarter, and now accounts for 11.3% of total revenue, up from 8.6% for all of 2007.
Interest costs for McClatchy, the nation’s third-largest newspaper chain, fell 22.1% to $41.9 million in the quarter. McClatchy CFO
Pat Talamantes said the company repaid $76 million in debt during the quarter.
Debt at the end of the quarter was $2.396 billion compared to $2.472 billion at the end of 2007, McClatchy said.
Separately, McClatchy announced Monday a tender offer for the cash purchase of up to $250 million aggregate principal of its outstanding public notes maturing in 2009, 2011 and 2014. The purchase will reduce the cost of debt, Talamantes said.
“The advertising environment continues to be weak,” Pruitt said. “We expect revenues in the second quarter of 2008 to be somewhat better than our first quarter advertising results, with advertising revenues down in the low to mid teen range.”
(This story has been corrected. The original version gave incorrect percentage losses for ad revenue in the quarter.)