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.