Business & Real Estate

McClatchy reports large increase in digital subscriptions, first quarter earnings loss

McClatchy – headquartered in Sacramento, Calif., and the publisher of 30 daily newspapers including The Sacramento Bee – posted a $42 million loss in the first quarter of 2019.
McClatchy – headquartered in Sacramento, Calif., and the publisher of 30 daily newspapers including The Sacramento Bee – posted a $42 million loss in the first quarter of 2019. Bee file

McClatchy’s losses widened in the first quarter, the company reported Thursday, while seeing growth in its digital subscription efforts.

The publisher of 30 daily newspapers, including The Sacramento Bee, posted a $42 million loss or $5.34 per share – nearly an 8 percent increase from the same period the year before.

McClatchy reported $180 million in revenues, which was down 9 percent compared with the first quarter of 2018. Advertising revenue came in at $85 million – a 15 percent decline from a year earlier.

In a move to reshape its business, McClatchy has pivoted to digital-only subscriptions as income from traditional print advertising continues to erode. The company reported having more than 179,000 digital-only subscribers, a 60 percent increase compared with the same period a year earlier.

“Our focus on paid digital subscriber growth is a key performance measure in our continuing digital transformation and a contributor to improving our audience revenue trend this quarter,” CEO Craig Forman said during a conference call with investors.

“We have tightened our paywalls, improved our ability to convert viewers to paid subscribers and sharpened our targeting for our digital products,” Forman said. “As a result, we achieved nearly 60 percent growth in digital-only subscriptions, reaching 179,100 at the end of the first quarter of 2019.”

The Sacramento-based company still carried about $745 million in debt by the end of the first quarter, which it said would be reduced by $32 million by the end of the second quarter thanks to the sale of a distribution center in Miami and another transaction.

McClatchy also started a voluntary early retirement program expected to result in $12 million in savings by the end of the year, company officials said. The program also reduced the company’s pension liability by 2 percent, down to $535 million.

McClatchy (MNI) shares closed Thursday at $2.85.

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