McClatchy Reports Profit -- But Also Takes a Charge

By: McClatchy Co. swung to a profit following losses a year ago on the sale of its Minneapolis newspaper, but the publisher also said it would take a charge to reflect a sharp decline in its stock price.

The company's operating results continued to be hard-hit by the real estate downturn in California and Florida, where it owns several newspapers, and the company said the advertising picture for 2008 wasn't looking any better. McClatchy (nyse: MNI - news - people ) said it now expects first-quarter advertising to decline in the low double-digit percentage range.

McClatchy, the third-largest U.S. newspaper publisher by circulation, reported preliminary net income of $30.1 million for the final three months of the year, compared with a loss of $279.3 million in the same period a year earlier.

The latest figures did not include the expected impairment charge, which McClatchy said it would announce later when it files its annual regulatory filing.

The earnings were equivalent to 40 cents per share on continuing operations, which included an additional tax expense of 9 cents per share. Accounting for that item, the earnings were a penny ahead of analysts estimates of 48 cents per share, as compiled by Thomson Financial.

In the same period a year ago, the company's net loss was $3.40 per share. Without the one-time losses, earnings from continuing operations were 94 cents per share.

Revenues fell 15 percent to $573.4 million. The year-ago period included one more week than the most recent quarter. Without that effect, revenues fell 9 percent, the company said.

McClatchy said it was still performing its annual test of the values of assets carried on its books, and expected to take a fourth quarter charge because of a decline in its stock price, which fell 37 percent in the period.

The stocks of many newspaper publishers have fallen badly out of favor on Wall Street as an economic downturn exacerbates advertising declines, which were already falling as readers and advertising dollars migrate online.