McClatchy 2Q profit drops on lower ad revenue

McClatchy, whose papers include the Miami Herald and Sacramento Bee, said Thursday the market for ad spending will not improve until the current economic slump abates.

"Whether revenues improve from recent trends depends upon the direction of the overall economy," Chairman and Chief Executive Gary Pruitt said in a statement.

In the latest quarter, the Sacramento, Calif.-based company said net income slid to $19.7 million, or 24 cents per share, from $35.2 million, or 43 cents per share, a year ago.

The results adjusted to exclude one-time items fell to $17.3 million, or 21 cents per share. That matches the average estimate of analysts surveyed by Thomson Financial.

Revenue dropped 16 percent to $489.7 million and missed Wall Street's projection of $495 million. Advertising revenue fell 17 percent and circulation revenue fell 5 percent.

Ad sales "continued to be hurt by the weak economy and the secular shift in advertising to the internet," Pruitt said.

With jobs shrinking and employers posting most positions online, revenue from classified ads fell 28 percent, with employment notices down 39 percent in the quarter. The housing market's swoon helped real estate ads drop 37 percent.

Revenue from McClatchy's online properties jumped 12.5 percent and accounted for nearly 12 percent of the total--up more than 4 percentage points from the same period last year.

Newspaper publishers are looking for ways to make enough money from their Web sites to offset the declines in more-lucrative print ads.