McClatchy posts 1st-quarter profit, shares down

Benchmark Co. media analyst Edward Atorino said McClatchy had a relatively good quarter, but some investors may have been looking for more details on how McClatchy plans to cut costs, given that it expects further revenue declines.

In a statement, McClatchy CEO Gary Pruitt said the company "will remain vigilant” on costs but acknowledged that second-quarter expenses will not decline the way they did in the first. During a conference call, Pruitt said the company would try to avoid further job cuts, but he didn’t rule them out.

The company, which is based in Sacramento, Calif., and publishes The Sacramento Bee, The Miami Herald and other newspapers, said net income, including discontinued operations, came to $2.2 million, or 3 cents per share. It lost $37.5 million, or 45 cents per share, in the same period a year earlier, which included charges for severance.

But the company would have posted a loss in the most recent quarter without a one-time accounting gain related to newspapers that it sold a few years ago. Various one-time charges for restructuring and refinancing of its debt led to a loss from continuing operations of $2 million, or 2 cents per share.

Overall revenue fell 8.2 percent to $336 million.

Ad revenue fell 11.2 percent in the most recent quarter from the same quarter last year, better than the 20.5 percent decline in the last three months of 2009.

Over the past week, Gannett Co., Lee Enterprises Inc. and The New York Times Co. also have reported an easing in the ad slump, though all three of them said their ad revenue decline in the first quarter was smaller than McClatchy’s.

Like the other newspaper publishers, McClatchy is benefiting from the improving economy. The company endured steep declines during the recession last year, dramatically lowering the bar that it must measure up to this year.

McClatchy said its costs, excluding severance payments, declined more than 21 percent in the first quarter, compared with the same period a year earlier, largely because of lower payroll and newsprint expense. McClatchy has cut about a third of its work force since the middle of 2008.