McClatchy reports loss in fourth quarter after refinancing charge

McClatchy Newspapers, owner of The News & Observer, The Charlotte Observer and 28 other daily newspapers, reported Thursday that it swung to a net loss in the fourth quarter due to a debt refinancing charge.

The company had a net loss of $30 million, or 35 cents per share, including a $60 million after-tax loss on debt refinancing. That compared with net income of $42 million, or 49 cents per share, during the fourth quarter of 2011.

McClatchy refinanced much of its debt last year at a lower interest rate and extended the maturity date by five years.

Revenues for the fourth quarter were $355.7 million. The company's 2012 fourth quarter included an extra week -- 14 compared to the 13 weeks in 2011 -- and on a 13-week basis revenues were an estimated $333 million, down 5.3 percent compared to the fourth quarter in 2011.

On a 13-week basis, advertising revenue was down about 6.3 percent and circulation revenues were down 1.9 percent in the fourth quarter of 2012.

McClatchy, like other newspaper publishers, has struggled to recover from a severe decline in advertising revenue in recent years. Although the company's digital advertising revenue has been growing, it has not been enough to offset the decline in print advertising dollars.

Digital advertising revenue grew 3.5 percent on a 13-week basis for the quarter. Digital advertising represented 20 percent of McClatchy's total advertising revenues in the quarter, up from 18.5 percent during the same period in 2011.

"In spite of a softer-than-expected Christmas season for our advertisers, our ad revenue picture improved through most of 2012," Pat Talamantes, McClatchy's CEO, said in a statement.

On a 52-week basis, the company's advertising revenues were down 6.1 percent in 2012, compared to 7.7 percent in 20111.

McClatchy continues to be burdened with debt from its 2006 acquisition of the Knight Ridder newspaper chain. McClatchy said its debt totaled $1.628 billion as of Jan. 17.