News Column

McClatchy Reports Lower Q4 Profits and Revenue

Feb. 7, 2013

Dale Kasler, The Sacramento Bee

The McClatchy Co. today reported lower profits and revenue for the fourth quarter, citing disappointing December holiday advertising.

Sacramento-based McClatchy, which owns The Bee, said profits excluding one-time adjustments fell to $33.8 million from $43.2 million.

The one-time adjustments -- including a $60 million after-tax loss because of the costs of a major debt refinancing -- plunged McClatchy into a bottom line, net income loss for the quarter and all of 2012.

Revenue actually grew 1.2 percent during the quarter, but that was because the 2012 quarter had 14 weeks vs. the 13 weeks for the 2011 quarter. On a comparable basis, revenue fell 5.3 percent and advertising revenue fell 6.3 percent.

The results showed that McClatchy, while making progress, has still been unable to shake an advertising downturn that has gripped much of the traditional media industry since 2006. Ad revenue fell 6.1 percent for all of 2012, compared to a drop of 7.7 percent the year before.

"In spite of a softer-than-expected Christmas season for our advertisers, our ad revenue picture improved through most of 2012," said President and Chief Executive Pat Talamantes in a prepared statement.

On a per-share basis, the company lost 35 cents in the fourth quarter compared to a profit of 49 cents the year before.

For the full year, the company lost $100,000 compared to a gain of $54.4 million in 2011.

The bottom line numbers were skewed by millions spent refinancing debt. In early December, the company said it was able to refinance about $846 million in bonds, or roughly half its total debt.

The move pushed back the maturity on those bonds five years, to 2022, giving McClatchy additional breathing room as it deals with the advertising slump and the ongoing transition to a hybrid print-digital world.

During the fourth quarter, digital advertising grew 3.5 percent. Online advertising now makes up 20.2 percent of all McClatchy advertising.

McClatchy stock fell 10 cents a share to $2.90 in early New York Stock Exchange trading.

Source: (c)2013 The Sacramento Bee (Sacramento, Calif.) Distributed by MCT Information Services

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