The company reported a profit this past quarter, after reporting losses a year ago on the sale of its Minneapolis newspaper, but McClatchy also said it would take an accounting charge to reflect the sharp decline in its stock price. McClatchy's stock price dropped 71 percent during 2007. The previous quarter, McClatchy took an accounting charge of $1.4 billion, based on its falling stock price.
Ad revenues continue to be a major problem for McClatchy. Over the comparable period last year, ad revenues dropped 9.3%. Classified ads were way down due to weak real estate market in Florida and California. Web-based real estate ads fell 6.5 percent, and print ads in real estate dropped an astonishing 32.7 percent. Employment ads were down 24 percent in the 4th quarter, as online help wanted ad revs fell 15 percent during the period. Ads for "retail and autos" were down 2.7 percent in the quarter, although online retail ads in the category grew 36.6 percent.
The outlook for advertising revenue in 2008 isn't bright, according to CEO Gary Pruitt.
We now expect advertising will likely be down in the low double-digit range in the first quarter of 2008,” Mr. Pruitt says. “As the year progresses we expect advertising revenue trends to improve somewhat from the first quarter, but we don't have sufficient visibility to be more specific.”
Company press release here.
