This blog is mainly about the spectacular train wreck at The Sacramento Bee and its parent company, the McClatchy Company. But I also post about current events, the Iraq and Afghanistan wars, politics, anything else that grabs my attention. Take a look around this blog, hope you enjoy it.
Newspaper rally? Curb your enthusiasm (newsosaur.blogspot.com)
After some notable newspaper publishers this month reported better-than-expected gains in their second-quarter net profits, Wall Street responded by bidding up their battered shares. But let’s not get carried away.
The improved earnings reflect one-off events that for the most part cannot be replicated if sagging ad sales fail to rebound really hard, really fast and really soon. In other words, publishers are running out of magic at a time when there is scant evidence that ad sales are headed for the sort of dramatic turnaround that would restore the industry to its former vigor.
Things certainly looked encouraging when some of the leading companies reported their second-quarter earnings. Gannett swung to a net after-tax profit of 30 cents a share from a loss of $10.03 per share in 2008; McClatchy more than doubled its earnings to 50 cents a share, and the net at the New York Times Co. leaped 85% to 27 cents.
But a closer look at the operating performance of the three companies shows that none was able to cut its expenses deeply enough in the first half of the year to stay ahead of the catastrophic revenue declines eroding their operating margins.
Consequently, the earnings of the companies before interest, taxes, depreciation and amortization fell by respectively 41.6%, 35.5% and 64.6% from the first half of 2008. This put EBITDA in the first six months of this year for Gannett at 17.3% vs. 24.3% in 2008, McClatchy at 15.3% vs. 17.7% and NYT at 4.1% vs. 9.4%.
But their patience will not be infinite. If newspapers can’t find a way to do better by their readers, they are in danger of slashing themselves to oblivion.
Yet another person that puts all of the "stock" in YoY declines.
The expense cuts are permanent, not a 1 time gain. Thus, all things being equal, if McClatchy earns $365m in Q3 they would still profit $40m even though YoY "declines" would show that they lost another 20%+.
This is what people cannot understand. Using YoY comps delays the ability to figure out when things have turned around. Once YoY comps actually increase, then that means the company turned the corner 1 year earlier.
When you are in a free fall...you have to resort to basic accounting and compare Q to Q to gauge how the company is doing.
5 comments:
Liberal Biased Newspapers shill to elect Marxists Community organizer.
Six months later six community newspapers get cut? Oh the humanity! Just wait for DeathCare to pass
Lib logic tehn dictates we need a tax, a subsidy, or more community organizers to help community newspapers!
Newspaper rally? Curb your enthusiasm (newsosaur.blogspot.com)
After some notable newspaper publishers this month reported better-than-expected gains in their second-quarter net profits, Wall Street responded by bidding up their battered shares. But let’s not get carried away.
The improved earnings reflect one-off events that for the most part cannot be replicated if sagging ad sales fail to rebound really hard, really fast and really soon. In other words, publishers are running out of magic at a time when there is scant evidence that ad sales are headed for the sort of dramatic turnaround that would restore the industry to its former vigor.
Things certainly looked encouraging when some of the leading companies reported their second-quarter earnings. Gannett swung to a net after-tax profit of 30 cents a share from a loss of $10.03 per share in 2008; McClatchy more than doubled its earnings to 50 cents a share, and the net at the New York Times Co. leaped 85% to 27 cents.
But a closer look at the operating performance of the three companies shows that none was able to cut its expenses deeply enough in the first half of the year to stay ahead of the catastrophic revenue declines eroding their operating margins.
Consequently, the earnings of the companies before interest, taxes, depreciation and amortization fell by respectively 41.6%, 35.5% and 64.6% from the first half of 2008. This put EBITDA in the first six months of this year for Gannett at 17.3% vs. 24.3% in 2008, McClatchy at 15.3% vs. 17.7% and NYT at 4.1% vs. 9.4%.
But their patience will not be infinite. If newspapers can’t find a way to do better by their readers, they are in danger of slashing themselves to oblivion.
McCLACTHY INSULTS HALF THEIR READERS EVERY DAY
Yet another person that puts all of the "stock" in YoY declines.
The expense cuts are permanent, not a 1 time gain. Thus, all things being equal, if McClatchy earns $365m in Q3 they would still profit $40m even though YoY "declines" would show that they lost another 20%+.
This is what people cannot understand. Using YoY comps delays the ability to figure out when things have turned around. Once YoY comps actually increase, then that means the company turned the corner 1 year earlier.
When you are in a free fall...you have to resort to basic accounting and compare Q to Q to gauge how the company is doing.
Work furloughs announced today at the Fort Worth Star-Telegram.
Sorry. Didn't realize the FWST furlough announcement was covered in another thread.
Should have looked before I leaped.
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