McClatchy revenue drops 6.4%

Newspaper publisher The McClatchy Co. reported that second-quarter revenue fell 6.4 percent, as advertising and circulation continue to suffer.

The revenue decline, how ever, was an improvement from steep drops during the worst of the recession. It's also the latest sign that the weak advertising market that has hurt most media companies is slowly reviving.

Other newspaper publishers, including Gannett and The New York Times, also have reported recently that the ad erosion is easing.

McClatchy has a long road to recovery. The company is trying to adapt as readers and advertisers increasingly migrate to online news. And it remains burdened with heavy debt from its 2006 acquisition of the Knight-Ridder chain. As of June 30, the debt was $1.836 billion.

The Sacramento, Calif.-based company is the parent of 30 daily newspapers, including The News & Observer, The Charlotte Observer and Miami Herald. It also owns 43 nondailies such as the Cary News and Chapel Hill News.

McClatchy's total revenue for the three months ended June 30 was $342 million. Ad revenue fell 8.2 percent from a year earlier to $260.5 million. Circulation revenue was down 2.4 percent.

"We continue to see signs of recovery," CEO Gary Pruitt said in a prepared statement. "Notably, employment advertising, more than half of which is now online, was up 1.5 percent in May and 0.8 percent in June. In fact, May 2010 was the first month with growth in employment advertising revenue in four years.

"So while the economic recovery hasn't been robust or smooth, we believe it is beginning to spread across the markets we serve," he said.

Online revenue increased 0.6 percent during the quarter.

Net income fell to $7.3 million, or 9 cents per share, from $42.2 million, or 50 cents per share. The company slashed costs, and thousands of jobs, in recent years to offset weaker revenue.

McClatchy shares fell 15 cents Thursday to close at $3.57. The stock is down48 percent since closing at $6.95 on April 20. That was its highest close in two years.

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