Newspaper publisher The McClatchy Co. reported weaker sales and profit this morning, as the slump in advertising and circulation revenue continued.
Second-quarter revenue fell to $314.3 million, down 8.1 percent from a year earlier. That rate of decline was an improvement from double-digit declines during the depths of the recession, but still reflects a weak economy that's hurting the newspaper business.
Sacramento, Calif.-based McClatchy publishes 30 daily papers across the country, including the News & Observer, Charlotte Observer and Miami Herald. Its papers in Florida and California have been especially hard hit by the housing slump and high unemployment rate.
Net income fell to $4.9 million, or 6 cents a share. That was less than a year earlier, but slightly better than Wall Street had expected.
McClatchy has been slashing hundreds of jobs across its operations to reduce expenses. Total expenses excluding severance costs fell $17.2 million, or nearly 7 percent, in the second quarter.
"We saw some improvement in revenue trends in the second quarter of 2011, helped in part by retail advertising associated with the late Easter holiday in April," said CEO Gary Pruitt, in a prepared statement. "Still it is clear that the weak economic recovery is having an impact in the markets we serve."
On a conference call with Wall Street analysts, Pruitt said the cost-cutting would continue, but he didn't say whether that would include more layoffs.
"It feels like the 19th inning" of the cost cutting, Pruitt said. "I'm hopeful that we are much closer to the end than the beginning."
There were some bright spots in the earnings report.
The company's digital business continues to expand, as readers and advertisers shift to online media. Daily average unique visitors to its web sites was up 5.5 percent during the quarter. And digital advertising rose 1.6 percent.
Sunday circulation rose 0.7 percent, an uptick Pruitt attributed to stronger content and marketing. But he also noted that more people are buying Sunday papers to get the coupon inserts.
McClatchy also continues to chip away at its massive debt, incurred when it bought the Knight Ridder chain. As of June 30, the debt was $1.68 billion.
The company's stock, down 38 percent in the past year, fell 5 cents today to $2.28.
Assistant Business Editor Alan M. Wolf joined the N&O in 1999 covering the business of health care. He became an editor in 2001, and helps oversee the paper's daily business coverage and Sunday Work&Money section. He lives in Clayton with his wife and two children. Reach him at 919-829-4572 or
Comments
Here's a little birdie for ya
Thu, 07/28/2011 - 18:52 — AmericanWorkerNotalib, DrB, Inspector:
The lot of you should exercise your capacity for shame, if you have any left ... Most people at the N&O have nothing to do with its editorial pages. Every time you snidely giggle at their layoffs, you're really celebrating the unemployment of folks in staff writing, accounting, advertising, delivery, press maintenance, etc ... And no, I don't work there. But in case ya ain't noticed, there's a recession going on, and these are hard times for folks. Most of us have empathy.
Tell you what. Let us know when *your* company downsizes, and I'll write in to kick ya when you're down, metaphorically speaking.
Freaking humpachumps.
Not Laughing @ Layoffs
Thu, 07/28/2011 - 22:05 — InspectorPittAmericanWorker, I'm not laughing at layoffs, and if you think so, for that I apologize. I don't find it amusing that anyone loses a job, especially those in the private sector.
However, we have a newspaper ... the N&O ... whose editorial staff believes that in time of an economic downturn the government should keep spending and taxing while their management has to realistically deal with decreased revenue by laying people off.
For some reason, the two doesn't add up to me. For it is my belief that if the American private sector worker is being laid off due to a recession, then the government workers should have to face the same fate in lieu of raising taxes on those left in the workplace to feed a bloated government that faces deficit spending.
You shame the wrong people
Thu, 07/28/2011 - 21:51 — PACK_MIKE77The people that should be ashamed are the ones still in charge that approved the Knight-Ridder merger. What a bunch of dolts. Then the constant turn to liberal sleeze.
The McClatchy employees did not have a chance. The lucky ones were the ones that realized they worked for a bunch of rubes and headed for other jobs.
I bet Ted Vaden is laughing every day!
Left Leaning??? There ain't no stinking Progressives here, man.
Thu, 07/28/2011 - 16:11 — DrBentonQuestI am just glad the N&O's positions on promoting and protecting abortion, electing liberal democratics, granting legal status to all illegal aliens, demanding increased corporate taxes while they maintain tax exampt status on their own product, promoting redistribution of wealth, and making sure rich privaledged lacrosse players from Duke go to jail regardless of their guilt or innocence but based soley on the fact that they were born rich and white ,,,, well, I am just glad none that has nothing to do with it. I know this as fact because John Drescher tells me it is, and I believe everything he prints.
LOL
Thu, 07/28/2011 - 21:59 — InspectorPittI see you're on a rol!
Suggestion
Thu, 07/28/2011 - 16:00 — InspectorPitt"McClatchy has been slashing hundreds of jobs across its operations to reduce expenses. Total expenses excluding severance costs fell $17.2 million, or nearly 7 percent, in the second quarter."
I would suggest some new editorial writers with a more center-right leaning. That might curtail the sharp decline in revenue. When your editorial writers can look at state and federal budget shortages and not recommend severance and cost cutting similiar to what your own newspaper company is experiencing, then you have writers that have no clue about economic issues. A j-school degree is not a business degree, I suppose.
Just Us
Thu, 07/28/2011 - 16:21 — DrBentonQuestThey already have Charles Krauthammer and George Will for pete's sake. How many more do you expect them to have? There is only space for 15 or 20 you know. Try to be reasonable.
One needs only read the letters to the editor printed daily in the ol' good and reliable to see that the vast majority of people in Wake, Durham and Orange counties are good progressive liberals, so it is only reasonable to Orage cater to his base, cuz he's one of them smart 'un's he is. InspectorPitt, I suggest you learn a thing or two from the good and reliable N&O instead of making suggestions.
And, for your information, J-school has to do with "Justice". That is what those with J-school degrees seek. It clearly has nothing to do with Journalism.
I love it
Thu, 07/28/2011 - 21:57 — InspectorPittI love your j-school definition. I laughed.
However, when it comes to revenue, we're dealing with advertisers, Dr.BentonQuest. And, most of the business folks up in good ole Raleigh ain't those "smart'um's" liberals.
I needed the laugh.
Good
Thu, 07/28/2011 - 12:31 — notaliberalHopefully it will only be a matter of time before the scandal rag N&O goes down the tubes where it belongs. We always have the National Enquirer.