The McClatchy Co. reported a drop in third quarter profits today, as the parent company of The Bee continued to grapple with a decline in advertising revenue.
Sacramento-based McClatchy said third quarter profits fell to $5.1 million from $9.4 million a year earlier. Per-share earnings fell to 6 cents from 11 cents. Throwing out various one-time adjustments, profits fell to $8.8 million from $10 million a year ago.
Advertising sales fell 5.4 percent from a year ago - representing a slight improvement in trends. In the second quarter, ad revenue was down 5.7 percent from the prior year, and it fell 6.8 percent in the first quarter. Total revenue dropped 4.2 percent to $287.5 million.
"We're making progress in an uncertain economy," said Chief Executive Pat Talamantes in a prepared statement. "We were particularly pleased to see continued growth in our digital advertising revenues and are excited about initiatives underway to pursue new revenue in both advertising and subscriptions."
The company's online ad revenue rose 2.7 percent and now represents 22.9 percent of all advertising sales.
Talamantes said McClatchy is pleased with the early results of its "metered paywall" program, which charges users for access to the websites at The Bee and four other papers. As the program gets rolled out to other McClatchy papers, he said digital subscription revenue could top $20 million next year.
Like other newspaper publishers and traditional media, McClatchy has been struggling with an ad slump that dates to 2006. The New York Times Co. reported a quarterly loss today as newspaper ad revenue fell nearly 9 percent.
McClatchy stock fell 6 cents a share, to $2.55, in early New York Stock Exchange trading.
Talamantes said McClatchy is "cautiously optimistic for another strong holiday season" but couldn't offer detailed projections on ad revenue in the fourth quarter.
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