The McClatchy Company (NYSE-MNI) today reported net income from continuing operations in the second quarter of 2009 of $42.0 million, or 50 cents per share - more than double the earnings per share in the second quarter of 2008. Adjusted earnings from continuing operations, (1) excluding several unusual items in the second quarter of 2009, were $25.2 million, or 30 cents per share, up 42.9% from the 2008 quarter. Total net income including discontinued operations was $42.2 million, or 50 cents per share.
The company's second-quarter 2008 earnings from continuing operations were $20.1 million, or 24 cents per share. Adjusted earnings from continuing operations,(1) excluding several unusual items in the second quarter of 2008, were $17.3 million, or 21 cents per share. Total net income including discontinued operations was $19.7 million, or 24 cents per share.
Unusual items affecting the second-quarter results in each year are discussed below.
Revenues in the second quarter of 2009 were $365.3 million, down 25.4% from revenues from continuing operations of $489.7 million in the second quarter of 2008. Advertising revenues were $283.7 million, down 30.2% from 2008, and circulation revenues were $69.4 million, up 5.0%.
First Six Months Results:
Income from continuing operations in the first half of 2009 was $4.3 million, or 5 cents per share. Adjusted earnings from continuing operations,(1) excluding several unusual items discussed below, were zero cents per share. Total net income, including discontinued operations, was $4.7 million, or 6 cents per share.
Income from continuing operations for the first six months of 2008 was $19.1 million, or 23 cents per share, and was affected by the issues discussed below. Adjusted earnings from continuing operations(1) were 24 cents per share in the first half of 2008. The company's total net income for the first six months of 2008, including the results of discontinued operations, was $18.8 million, or 23 cents per share.
Revenues from continuing operations in the first six months of 2009 were down 25.3% to $731.0 million compared to $978.0 million in 2008. Advertising revenues in 2009 totaled $568.4 million, down 29.9%, and circulation revenues were $137.8 million, up 2.9%.
Commenting on McClatchy's results, Gary Pruitt, chairman and chief executive officer, said, "We are extremely pleased to post earnings per share growth of 42.9% after adjusting for unusual items in the quarter, particularly given the impact of the recession in our markets. While our advertising revenues in the second quarter of 2009 were down in the same range as the first quarter, we saw an improving trend within the quarter. Advertising revenues were down 31.1% in April, 30.7% in May and 28.3% in June. So far, July's performance is similar to June's.
"Our second-quarter results also reflect our hard work on the expense side. We continue to restructure and permanently reduce expenses to better align our costs with our revenues. We reduced cash expenses in the second quarter of 2009 by 29.3%, excluding severance and other benefit charges related to our restructuring plan, resulting in operating cash flow of $92.4 million.
"Our operating cash flow margin for the quarter was a healthy 25.3% compared to 21.2% for the 2008 quarter. Our company remains profitable and each of our newspapers is contributing positive cash flow.
"McClatchy continues its transition to a successful hybrid print and online company. Our digital audience continues to grow impressively. Average monthly unique visitors to our websites were up 30.1% in the second quarter following 26.7% growth in the first quarter of 2009. Still, the recession is impacting our digital business. Our digital advertising was down 2.9% in the second quarter of 2009, hurt particularly by declining employment advertising. Excluding employment advertising, which has declined nationally both in print and online, our online advertising revenue grew 24.7% in the second quarter of this year.
"Our digital performance has been aided by ownership stakes in CareerBuilder, Cars.com, and Apartments.com, leading companies in the digital classified advertising arena. And our growth in digital retail advertising of 50.7% in the first half of 2009 is fueled in part by our partnerships with Yahoo! and other technology companies.
Update: Investors like the report: MNI is up 24 cents to 78 cents per share as of 10:37 EST.