McClatchy Co. revenues fell 4.2 percent in the third quarter, as the company was hurt by declines in several major print advertising categories.
McClatchy, owner of The News & Observer, The Charlotte Observer and 28 other daily newspapers, reported Thursday net income of $7.3 million, or 8 cents a share, versus net income of $5.1 million, or 6 cents per share, during the third quarter of 2012.
"Our company-wide revenue performance again reflected an uneven print advertising environment,” CEO Pat Talamantes said in a statement. “Revenue trends in the automotive and real estate classified advertising categories improved while we had larger declines in categories such as retail and national advertising compared to last quarter.”
Talamantes said the company had little visibility on the upcoming Christmas holiday season, which will be the major determining factor in the fourth quarter.
McClatchy has been working to offset a severe decline in print advertising revenue by increasing online revenue. Last quarter the company reported that revenues were down 3.5 percent compared to the same period a year ago.
While total advertising revenues in the third quarter declined 8.1 percent, digital-only revenues from advertising and circulation increased 13.1 percent.
Circulation revenue increased 6.5 percent, aided by McClatchy's implementation of metered pay walls at its newspaper websites. The program added more than $8 million in revenues during the quarter and has generated $22.6 million in revenues so far this year.
"Despite the advertising performance, our revenue diversification strategies are paying off,” Talamantes said. “Growth in digital advertising, circulation and direct marketing revenues helped mitigate the overall decline in traditional newspaper advertising revenues in the 2013 third quarter.”
McClatchy's debt at the end of the quarter was $1.556 billion, down $10 million from the previous quarter.
McClatchy shares closed Thursday at $3.12, down 24 cents. The stock is flat for the year.