By: Mark Fitzgerald
The McClatchy Co. reported a lower second-quarter profit Thursday on a revenue decline that slowed to the lowest rate in the past three reporting periods.
Advertising revenue at parent company of The Miami Herald and Kansas City Star declined 8.2% year-over-year in the quarter, compared to declines of 11.2% in the first quarter of 2010 and 20.5% in the fourth quarter of 2009.
The improving trend continued during the quarter, McClatchy Chairman and CEO Gary Pruitt said, with ad revenues down 10.2% in April, down 7.3% in May and down 6.4% in June.
“We continue to see signs of recovery,” he said. “Notably, employment advertising, more than half of which is now online, was up 1.5% in May and 0.8% in June. In fact, May 2010 was the first month with growth in employment advertising revenue in four years.”
For Q2, McClatchy Co. earned $7.3 million, or 9 cents per share, down from $42.2 million, or 50 cents per share, in the second quarter of 2009, when results were boosted by a gain from debt restructuring.
Overall revenue dropped 6%, compared to an 8% drop in the first quarter of the year.
McClatchy continued to chop away at expenses, which fell 9.1%, excluding severance costs, compared to the first quarter of 2009.
McClatchy also drew down its debt during the quarter, and improved its leverage ratio of debt to cash flow to 4.43 times cash flow from 4.65 times at the end of the first quarter, CFO Pat Talamantes said.
“We were able to extend a majority of our debt maturities to 2017 with our debt refinancing in February this year, and we have continued to reduce our debt,” he said. “We’ve repaid more than $113 million in debt in the first six months of 2010, and debt principal at the end of June was $1.836 billion. Our maturities through 2013 consist of only $35.7 million due in mid 2011 and $43.5 million due in mid 2013.”
In early trading Thursday, McClatchy stock (NYSE: MNI) was up slightly, gaining 8 cents, or 2.2%, to $3.80. MNI has traded in a 52-week range of $1.40 to $7.16.