Fourth-quarter profit falls for McClatchy Co.
02/08/2013 12:00 AM
02/10/2013 2:09 PM
Soft holiday advertising hurt The McClatchy Co.'s fourth-quarter results, and the cost of refinancing its debt left the newspaper chain with a loss.
Sacramento-based McClatchy said Thursday that fourth-quarter profits, not counting one-time costs, fell to $33.8 million from $43.2 million a year earlier.
The Bee's parent said revenue grew slightly because the quarter had an extra week. On a comparable basis, total revenue fell 5.3 percent. Ad sales dropped 6.3 percent.
The results show that McClatchy, despite some improvements, remains gripped by an ad slump that has affected much of the traditional media since 2006.
The latest results were colored by a so-so December. Retailers had disappointing holiday sales and pulled back on their advertising.
"December was weaker than we would have hoped for," said Pat Talamantes, McClatchy's president and chief executive, in a conference call with investment analysts.
One positive was digital advertising, which grew 3.5 percent in the quarter and accounted for 20 percent of all ad sales.
Beyond the day-to-day results, the company spent $94.5 million to refinance much of its debt. Much of the cost was from paying a premium to buy out existing bonds.
The expense produced a bottom-line loss of $30 million, or 35 cents a share, compared to a year-ago profit of $42 million, or 49 cents a share.
Refinancing let McClatchy defer maturity on about half of its $1.6 billion debt for five years, to 2022.
McClatchy believes that will help it weather the ad slump and the transition to a media world increasingly dominated by digital.
For the full year, including the refinance expenses, the company lost $144,000 compared to a $54.4 million profit in 2011.
Total revenue fell 3.1 percent to $1.23 billion. Ad sales fell 6.1 percent compared to 7.7 percent in 2011.
As for 2013, Talamantes said January ad sales were down "in the same range" as the 6.3 percent reported in the fourth quarter.
On the other hand, he said McClatchy expects to generate $20 million in new revenue this year from its "metered pay wall," which charges users for access to the company's websites. "The vast majority of subscribers are buying into this," he said.
McClatchy closed at $2.75, down 24 cents, on the New York Stock Exchange.
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