The McClatchy Co. reported a drop in quarterly profits Thursday as The Bee's owner contended with an ongoing decline in advertising.
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.
Company officials took comfort in the fact that the decline in advertising is easing.
Ad revenue was down 5.4 percent in the third quarter, 5.7 percent in the second quarter and 6.8 percent in the first quarter.
"The advertising trend continued to move in the right direction in the third quarter," President and Chief Executive Pat Talamantes said on a conference call with investment analysts.
Total revenue fell 4.2 percent to $287.5 million.
Talamantes said McClatchy is "making progress in an uncertain economy," noting a 2.7 percent increase in digital ad sales. What's more, he said, the company is pleased with early results from its "metered pay wall," which charges users for access to the websites of The Bee and four other papers.
The program will be rolled out soon to other McClatchy papers, and Vice President Chris Hendricks said it could translate into $20 million in new revenue in 2013.
Like other newspaper publishers and traditional media, McClatchy has been struggling with an ad slump that dates to 2006 due to the soft economy and competition from myriad online competitors. The New York Times Co., for instance, said Thursday it lost money in the third quarter and its newspaper ad sales fell 9 percent.
McClatchy stock closed unchanged at $2.61 on the New York Stock Exchange.
Talamantes said McClatchy is "cautiously optimistic" about the fourth quarter but said holiday advertising is so volatile that he couldn't offer detailed projections.
"We're hesitant to draw conclusions," he said.