By: (AP) Newspaper publisher McClatchy Co. said Tuesday that its third-quarter profit dipped slightly as litigation costs and sluggish retail advertising dragged down earnings.
The company also announced that it found no problems with circulation reporting at its Star Tribune newspaper in Minneapolis, according to a recently completed investigation launched in response to a lawsuit.
McClatchy is being sued by four Minneapolis employment agencies who claim the Star Tribune inflated its circulation numbers .
McClatchy's earnings fell to $38.6 million, or 82 cents per share, from $39.1 million, or 83 cents per share, last year. Not counting litigation costs, third-quarter earnings would have been $39.3 million, or 84 cents per share, McClatchy said.
Revenue rose slightly to $292.6 million, up 2% from $286.7 million a year earlier.
The results matched Wall Street's expectations, which called for earnings of 82 cents per share and revenue of $292.7 million, according to a Thomson Financial poll.
Sluggish retail advertising and continued declines in car ads cut into revenue growth during the quarter, CEO Gary Pruitt said in a statement. Real estate and employment advertising, however, remained strong in print and online, with online advertising continuing to show strength across categories, he said.
Overall, advertising revenue rose 3% to $247.4 million, but circulation revenue fell 4% to $40 million.
Looking ahead, McClatchy said it expects similar advertising results in the fourth quarter. It forecast fourth-quarter earnings of 98 cents to $1 per share, and full-year earnings of $3.44 to $3.46 per share.
Excluding litigation costs, McClatchy said it sees full-year earnings of $3.45 and $3.47 per share, just below analysts' estimates of $3.48 per share. Last year, the company earned $3.33 per share including a 5 cent per share debt refinancing charge.
McClatchy shares rose 12 cents to $64.21 on the New York Stock Exchange.
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