McClatchy's Earnings Up Sharply

By: Jessica V. Brice, Associated Press Writer (AP) Newspaper publisher McClatchy Co. posted sharply higher earnings Thursday for the fourth quarter, beating analysts' expectations.

Net income for the quarter ending Dec. 29 was $39 million, or 84 cents per share, compared with $20.9 million, or 46 cents a share, a year earlier.

Excluding a one-time expense of $1.6 million to write down the value of land at The News & Observer in Raleigh, N.C., its earnings were 86 cents a share.

That beat McClatchy's October forecast of 76 cents to 78 cents per share, as well as the consensus forecast of 80 cents a share by analysts surveyed by Thomson First Call.

Revenues increased by 4% to $287.9 million from $276.7 million during the same period in 2001.

In trading on the New York Stock Exchange, McClatchy shares rose 90 cents, or 1.7%, to $55.60.

McClatchy's newspaper circulation grew for the 18th year in a row, said Gary Pruitt, McClatchy chairman and chief executive.

Advertising revenues in the fourth quarter moved up 4.9% to $236.3 million, and circulation revenues were $42.6 million, up 1.5%.

McClatchy expects first quarter 2003 earnings to be between 55 and 57 cents per share, Pruitt said. Analysts expected 61 cents per share.

Pruitt said investors can look to two McClatchy regions to fuel company growth. "The two markets that have the biggest bounce-back potential are Minneapolis and the Raleigh newspaper," Pruitt said, adding that those two regions were hit the hardest by declining help-wanted advertisements.

Pruitt added that the company remains cautious because of higher newsprint prices, employee retirement costs, and medical care expenses. He also discussed the impacts of a potential war with Iraq, noting that the company's advertising revenues decreased during the first Persian Gulf War in the early 1990s.

"If a war breaks out, the uncertainty at this point is not nearly as great as it was in the early '90s," he said. "We're not factoring a major effect into our numbers."

For the year, the Sacramento-based company earned $131.2 million, or $2.84 a share, up from $58 million, or $1.27 a share, in 2001. Annual revenue was steady at $1.08 billion.

McClatchy publishes 11 daily and 13 non-daily newspapers in California, Minnesota, the Carolinas, and the Pacific Northwest. It also owns and operates Nando Media, an Internet publishing unit, and The Newspaper Network, an advertising insert group.

The Star Tribune of Minneapolis contributed 34% of the company's fourth quarter earnings, while the three California newspapers -- The Sacramento Bee, The Modesto Bee, and The Fresno Bee -- contributed 35% of the fourth quarter earnings.

Other newspapers include The News Tribune in Tacoma, Wash., and the Anchorage Daily News in Alaska.

On the Net: http://www.mcclatchy.com