Business & Real Estate

McClatchy digital ad revenue exceeds print earnings for first time. Company reports Q1 loss

Sacramento-based newspaper publisher McClatchy, which has embarked on a company-wide digital transformation, said Friday that digital advertising revenue exceeded print newspaper ad revenue for the first time in the first quarter of 2018.

Even so, the publisher of The Sacramento Bee and 29 other daily newspapers reported a net loss of $38.9 million, or $5.04 per share, in the first three months of this year.

That was down from a loss of $95.6 million, or $12.60 per share, in the first quarter of 2017. That loss included an after-tax non-cash impairment of $76.8 million on the carrying value of the company’s interest in CareerBuilder LLC . The company’s adjusted net loss, excluding severance and other items, was $14.5 million in last year’s initial quarter.

On Friday, the company reported an adjusted net loss of $20.3 million for the first quarter of 2018.

"The quarter just ended reflects a significant crossover point in the trajectory of our digital transformation," Craig Forman, president and CEO of McClatchy, said in a statement accompanying Friday's release of the quarterly financials. "Despite strong industry headwinds, we are making progress in our strategy to drive digital growth."

The media company said total print advertising in this year’s first quarter was $56.9 million, but $18.2 million of that was direct marketing revenue, leaving newspaper print revenue of $38.7 million. McClatchy amassed digital advertising revenue of $43 million in the quarter.

McClatchy (MNI) shares closed Friday at $9.38, up 9 cents, or nearly 1 percent, on the NYSE American stock exchange.

The company reported a 33 percent increase in digital subscriptions and growth of 13 percent in average monthly unique visitors to its news sites in the first quarter compared to the same quarter last year.

Forman said digital subscriptions totaled 112,200 at the close of the first quarter, up from 103,000 at the end of 2017 and about a 33 percent increase over subscriptions reported in last year's opening quarter.

Forman also cited this week’s launch of Subscribe with Google. The company’s collaboration with the internet services giant is designed to simplify the subscription process across the McClatchy chain.

With the tool, when a Google user hits a paywall on any McClatchy news site, a subscription box offers the option to subscribe directly with the local publisher, or with Google. When a user selects to pay with Google, access to local news content is immediate. Subscribe with Google enables users to access McClatchy's digital news content across platforms.

“…We're excited to see the impact of this experiment on the growth of our digital subscriptions starting in the current quarter,” Forman said.

Overall revenue in the first quarter was $198.9 million, down 10.1 percent compared with the first quarter of 2017. The company noted that the nationwide trend of declining print advertising revenue, particularly in retail, affected earnings.

Total advertising revenue was $99.9 million, down 16.7 percent from the year-ago period, although digital-only advertising revenue grew 21.6 percent and total digital advertising revenue rose 7.6 percent year-over-year

McClatchy said average total unique visitors to the company's online products totaled 78.2 million, up about 13 percent over the same quarter last year.