As it continues to focus on growing its online presence, newspaper publisher McClatchy on Friday reported a net loss of $37.4 million for this year’s second quarter.
Sacramento-based McClatchy, publisher of The Sacramento Bee and 29 other newspapers, said a significant portion of its quarterly loss included after-tax noncash impairments of $28.8 million on the carrying value of the company’s interest in CareerBuilder LLC and other equity investments.
McClatchy’s stake in CareerBuilder, an online job search site, had a similarly profound effect on its first-quarter earnings, with $76.8 million of its reported quarterly loss of $95.6 million related to a write-down of its investment in the service.
In simple accounting terms, impairment refers to assets that do not have the same value as they did in a prior period, prompting the asset to be revalued and a corresponding charge applied to a company’s net assets.
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In the second quarter of 2016, McClatchy reported a net loss of $14.7 million.
The company reported an adjusted net loss of $6.1 million, which excludes severance and certain other items, in the second quarter of 2017, compared to an adjusted net loss of $1.5 million in the second quarter of 2016.
Digital-only advertising revenue grew 10 percent year over year, to $32.7 million.
“While we continue to see strong headwinds in print advertising, we also are seeing our digital efforts in all aspects of the business moderate those headwinds,” Craig Forman, McClatchy’s president and CEO, said in a statement accompanying Friday’s news release on quarterly earnings.
Later, in a conference call, Forman noted that McClatchy had introduced a flurry of digital initiatives in the first half of this year. Those included an ongoing digital-driven “reinvention” in its newsrooms, including The Sacramento Bee. Forman said digital-only subscriptions ended the second quarter at 91,000, up nearly 14 percent from the second quarter of 2016.
Forman called the various initiatives “necessary changes…for our digital transition…journalism with the speed and the medium that our readers demand.”
McClatchy said average total unique and local unique visitors to the company’s online products were 66 million and 16.3 million, respectively, in the second quarter. Those totals represented respective year-over-year gains of 14.6 percent and 10.7 percent. Mobile users represented 60.2 percent of average total unique visitors in the most recent quarter, compared with 52.9 percent in the year-ago period.
Like other newspaper publishers, McClatchy has sustained a prolonged decline in print advertising revenue even as it puts more resources into digital products to capture a greater audience of online readers and advertisers.
The company’s revenue in the second quarter totaled $225.1 million, down 7.1 percent from the second quarter of 2016. Total advertising revenue was $125.2 million, down 11.1 percent from a year ago.
McClatchy announced last month that it had reached an agreement to sell the majority of its 15 percent ownership stake in CareerBuilder LLC in a deal expected to net the Sacramento company $76 million, but that deal is expected to close in this year’s third quarter. McClatchy inherited its CareerBuilder stake as part of its 2006 takeover of newspaper chain Knight Ridder Inc. for $4.4 billion.
CareerBuilder is co-owned by McClatchy, Tegna Inc. and Tribune Media.
The company’s stock closed at $8.52, down 15 cents, on the New York Stock Exchange.