McClatchy sees bump in profits from asset sale, but revenue drops
07/24/2014 6:24 AM
07/24/2014 6:25 AM
The McClatchy Co. reported a big jump in profits Thursday because of the sale of one of its Internet assets, but the Sacramento newspaper publisher continues to suffer the effects of an eight-year slump in advertising.
The owner of The Sacramento Bee and 28 other papers said net income rose to $89.9 million in the second quarter from $11.8 million a year earlier. Per-share earnings increased to $1.02 from 14 cents.
McClatchy said the improvement was largely due to profits from the previously announced sale of its share of the Apartments.com website. Along with a smaller gain on the sale of its share of a news-service partnership with Tribune Co., the Sacramento company enjoyed a one-time gain of $145.9 million before taxes.
With one-time adjustments taken out, McClatchy said quarterly profits fell to $2.8 million from $10.3 million. Revenue fell 3.2 percent to $292 million, and advertising sales fell 7 percent.
Pat Talamantes, McClatchy’s president and chief executive, said the company “saw a slowdown in print advertising among retail clients in the quarter.”
But he said McClatchy’s digital business continued to grow. Digital-only advertising and subscription revenue increased 10 percent. The company’s direct marketing operations improved almost 4 percent.
Like other newspaper companies, McClatchy continues to struggle with the transition to the more fragmented digital age. Print advertising, once the bulk of the company’s business, now accounts for slightly less than 40 percent of total revenue, Talamantes said in a conference call with investment analysts.
McClatchy also disclosed that it took a $1.7 million loss on the previously announced sale of the Anchorage Daily News. The paper was sold for $34 million to an Alaska Internet company.
McClatchy shares closed at $5.02, down 8 cents, on the New York Stock Exchange.
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