Despite double-digit growth in digital-only advertising revenue, McClatchy on Thursday reported a net loss of $95.6 million, or $12.60 a share, in this year’s first quarter.
Sacramento-based McClatchy, publisher of The Sacramento Bee and 29 other newspapers, said that figure included an after-tax noncash impairment of $76.8 million on the carrying value of the company’s interest in CareerBuilder LLC.
In the first quarter of 2016 McClatchy reported a net loss of $12.7 million, or $1.58 per share.
The company reported an adjusted net loss, which excludes severance and other items, of $14.5 million in the opening quarter, compared with a loss of $7.9 million in the first quarter of 2016.
“No question the headwinds that have affected our industry for the past several years continued in the first quarter, including several retailer bankruptcies driving the loss of 40,000 retailing jobs,” Craig Forman, McClatchy’s president and CEO, said in a statement accompanying Thursday’s news release on quarterly financials. “But at McClatchy, we are executing on our plan to accelerate the pace and cadence of our digital transformation while aligning our cost structure with the realities of the business environment.”
Elaine Lintecum, McClatchy’s vice president of finance and chief financial officer, noted that the company continues to expand digital-only audience and marketing efforts.
During Thursday’s conference call, Forman said extensive efforts to institute a companywide digital transition continue with a goal of making McClatchy the “digital media company we need to become.”
The company said average total unique and local unique visitors to McClatchy online products grew 27.5 percent, to 69.1 million, and 15.8 percent, to 16.7 million, respectively, year over year. Mobile users represented 60.4 percent of average total unique visitors in the first quarter of 2017 compared with 57.8 percent in the first quarter of 2016.
Digital-only advertising revenue grew 11.7 percent, to $29.8 million, in the first quarter.
Forman stressed that about “74 cents of every dollar” of first-quarter revenue came from sources other than print newspaper ads, up from 69.5 percent in the year-ago period. Forman called that a significant milestone in McClatchy’s ongoing digital transition.
Total revenue in the first quarter totaled $221.2 million, down 7 percent from last year’s opening quarter. Total advertising revenue was $119.9 million, down 12 percent year over year. The company said that decline was linked to continued softness in print advertising.
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 noncash impairment charge related to the write-down on the carrying value of McClatchy’s equity investment in CareerBuilder totaled $123 million, or $76.8 million after-tax. The first-quarter impairment charge was based on McClatchy’s best estimate of fair value.
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.
CareerBuilder, which oversees an international online employment website, is co-owned by McClatchy, Tegna Inc. and Tribune Media. McClatchy inherited a 33 percent stake in CareerBuilder as part of its $4.4 billion purchase of Knight Ridder in 2006.