The McClatchy Co. reported weaker fourth-quarter profit and revenue this morning, and the newspaper publisher warned that January brought bigger declines in advertising sales as the economic recovery remains shaky.
The Sacramento, Calif.-based publisher of The News & Observer, Charlotte Observer, Miami Herald and other newspapers across the country has been slashing costs to offset lower ad sales and to repay debt. McClatchy, like other media companies, was hit hard during the recession and is scrambling to beef up its online content as advertisers and readers migrate to the Internet.
For the final quarter of 2010, the company reported adjusted earnings from continuing operations of $33.6 million, or 39 cents per share. That was down from $49.6 million, or 59 cents a share, a year earlier.
Revenue fell 5.9 percent to $369.9 million.
But that rate of decline is much better than the double-digit drops McClatchy reported in recent years. While total ad revenue fell 6.9 percent during the fourth quarter, digital ad revenue increased 5.1 percent.
"Overall, we made good progress in 2010," said CEO Gary Pruitt, in a prepared statement. "We held costs down and saw advertising revenue trends improve."
Still, the company saw sharper ad declines in January, with total ad revenue down 10 percent.
"In response to this year's weak start, we have increased our ad sales efforts companywide and have initiated expense cuts at those newspapers that have seen the more significant ad revenue declines in December and January," Pruitt said.
That included eliminating 40 positions at the N&O and Charlotte Observer, including five newsroom jobs at each paper. Employees at both papers also are taking unpaid, week-long furloughs.
For the full year, McClatchy reported that revenue fell 6.5 percent to $1.4 billion. The company ended 2010 with $1.78 billion of debt, down $174 million from the year earlier.
McClatchy shares fell 61 cents today to close $4.38. The stock is now down about 6 percent so far this year.