McClatchy, in the doghouse with investors for most of the year, reported another disappointing quarter today, eking out a profit of $98,000 on $262 million in revenues.
Despite growing digital ad revenues, holding circulation revenues even and reducing debt and interest payments compared to the same quarter a year ago, the results were dragged down by a 12.5 percent decline in total advertising revenues.
McClatchy is first among the public newspapers to report for the second quarter so drops of nearly the same magnitude seem likely at other companies. As Gannett (which will report Wednesday) indicated as it spun off to a separate newspaper company a month ago, second quarter ad revenues have been weak there as well.
McClatchy said print advertising declines for the quarter were 16.3 percent. Full-run linage was down 15.3 percent and preprinted inserts distributed were off 17.8 percent.
These are all markers of retail and national advertisers shifting budgets to various digital marketing channels, particularly in mid-sized metros like Miami, Kansas City and Sacramento that dominate the company’s roster of 29 papers and their associated web sites.
With the latest losses, McClatchy reports it now gets just over two-thirds of revenue from activities other than print advertising.
The company labeled the results preliminary, indicating that it is marking down the value of its assets (a periodic accounting requirement) which will result in non-cash “impairment” charges for the second quarter.
CEO Pat Talamantes said the company is successfully pursuing initiatives to generate digital and other non-traditional income while reducing expenses in legacy operations. It forecast somewhat better results for the second half.
McClatchy shares closed at $1.00, down about 7.5 percent for the day.