Randy Pench / rpench@sacbee.com

Pat Talamantes

McClatchy Co. reports higher fourth-quarter profits

Published: Thursday, Feb. 13, 2014 - 6:26 am

The McClatchy Co. reported a slight increase in fourth-quarter profits Thursday even as print advertising continued to decline.

Sacramento-based McClatchy, which owns The Bee and 29 other daily newspapers, said quarterly profits rose to $29.9 million compared with $29.8 million a year earlier, excluding certain adjustments. Bottom-line net income, including those adjustments, improved to $12.5 million, or 14 cents a share. That compared with a loss of $30 million, or 35 cents a share, a year earlier.

The end of 2013 saw McClatchy in somewhat the same position it’s been the past few years: Trying to grow its digital business quickly enough to offset the slippage on the print side. It’s a situation common throughout the newspaper industry as print publications transition to the digital era.

“We continue to execute on our revenue diversification and digital growth strategies,” said Pat Talamantes, McClatchy’s president and chief executive, in a conference call with investment analysts. He said in a news release that the company “ended 2013 on a positive note.”

McClatchy’s numbers were skewed by a variety of factors, including an extra week in the fourth quarter of 2012.

On a comparable basis, with the additional week removed, McClatchy’s revenues fell 2.1 percent in the fourth quarter. Advertising revenue fell 6 percent, while circulation revenue grew 9.1 percent.

McClatchy’s digital and direct-marketing revenues each grew 2.2 percent during the quarter. The company said its Plus Program, which offers unlimited access to its digital sites for a fee, generated $8.8 million in new revenue in the quarter and $31.4 million for the whole year. Talamantes noted that the Plus Program was originally expected to generate only $20 million in new revenue for the year.

Digital-only revenue, including ad sales and subscriptions not connected to the print papers, grew 16 percent.

Print continued to struggle, as ad sales fell another 8 percent in the quarter. Still, Talamantes said McClatchy isn’t giving up on the medium, telling the analysts that “it’s not going to be this sea change where print drops off the face of the earth.”

For the whole year, McClatchy said earnings fell to $47.3 million from $52.4 million, excluding adjustments. Net income with the adjustments included came to $18.8 million, or 22 cents a share, compared to a loss in 2012 of $100,000. Revenue for the year totaled $1.24 billion. On a comparable basis, excluding the extra week in 2012, revenue fell 3.4 percent, with ad revenue falling 6.7 percent.

McClatchy shares closed at $4.64, up 34 cents, on the New York Stock Exchange.

Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

Read more articles by Dale Kasler

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