McClatchy posts quarterly loss on falling ad sales

By @ibtimes on

U.S. newspaper publisher McClatchy Co reported a quarterly loss on Thursday because of layoff charges and falling advertising revenue.

McClatchy, which publishes newspapers such as The Miami Herald and The Sacramento Bee, posted a first-quarter net loss of $37.5 million, or 45 cents a share, compared with a net loss of $849,000, or 1 cent a share, a year earlier.

Revenue fell 25 percent to $365.6 million.

The Sacramento, California-based company's performance during the quarter is similar to that of other newspaper publishers from Gannett Co Inc to The New York Times Co. Newspapers across the United States are facing mounting losses and heavy debt payments.

McClatchy, which last week received a delisting notice from the New York Stock Exchange because of its low share price, has been taking drastic action to save money as it deals with more than $2 billion in debt related to its purchase of Knight Ridder Inc in 2006.

In March, the company said it would cut 1,600 jobs, or 15 percent of its workforce, and slash executive pay by 10 percent to 15 percent. It also has suspended cash dividends.

Excluding $19.7 million in charges related to the layoffs, McClatchy reported a loss of $22.9 million, or 28 cents a share. That missed three analysts' estimates between losses of 5 cents and 16 cents a share, according to Reuters Estimates.

Ad revenue fell 29.5 percent to $284.7 million, including a nearly 5 percent fall in online ad revenue.

So far, April's revenue looks similar to the first quarter's, Chief Executive Gary Pruitt said in a statement.

The economic environment is still weak and, like everyone else, our visibility on advertising trends is limited, he said.

McClatchy plans to use its cash primarily to keep paying off debt. It said it has no debt maturities until 2011.

Earlier this month, it paid off $31 million in debt. The company also said it is in compliance with the borrowing terms it set up with its lenders.

McClatchy shares rose a penny to 57 cents in early trading on the New York Stock Exchange.

(Reporting by Robert MacMillan; Editing by Derek Caney)

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