Pruitt says job, newsprint cuts loom in 2008

Several U.S. newspaper publishers said on Wednesday they will bank on cost-cutting to salvage earnings next year, with McClatchy Co and E.W. Scripps Co forecasting drops in newspaper revenue.

"As we look to 2008, many of the economic challenges remain, particularly in our California and Florida markets," McClatchy Chairman and Chief Executive Gary Pruitt said in a statement.

"We do expect to see some improvement in revenue as the year progresses, but it will likely still be down in the mid-single-digit range for all of 2008," he said.

Cost-cutting through job losses and newsprint reductions is one of the main ways the industry is trying to combat the weakening circulation and advertising sales that have resulted from readers turning to the Internet and other media for their news. The slowing economy is yet another problem.

McClatchy, the publisher of the Sacramento Bee and Miami Herald, said it expects earnings to be stronger next year, largely due to lower interest expenses as the company has repaid debt. It did not give a specific earnings forecast.

Wall Street was looking for McClatchy's 2008 revenue to fall 5.4 percent to $2.13 billion, with earnings per share excluding special items dipping to $1.30 next year from a projected $1.44 this year, according to Reuters Estimates.

Pruitt said his company would focus on cost controls, and forecast 2008 cash expenses to be down in the mid-single-digit percentage range. He said McClatchy's debt at the end of 2008 would be about $2 billion.

Shares of McClatchy slipped 20 cents or 1.5 percent to $13.24, New York Times shares fell 40 cents or 2.4 percent to $16.55 and Gannett shares fell 5 cents or 0.1 percent to $35.70 on the New York Stock Exchange.

Click on the headline to read the full Reuters story by Paul Tomasch