McClatchy sees profit; charge set

The McClatchy Co. reported slightly better-than-expected profit for the fourth quarter Wednesday but said revenue continues to get hammered by competition from the Internet and a "recessionary" economy that's particularly rough on its California and Florida newspapers.

Sacramento-based McClatchy, the nation's third-largest newspaper publisher, said the first quarter of 2008 looks rocky but that the rest of the year might improve.

McClatchy also said it will take a non-cash charge against earnings to reflect the steep decline in its stock price. McClatchy said the charge, which will be detailed later this month, won't cost any money but will depress on paper the reported fourth-quarter profits.

McClatchy, which publishes The Bee, said it earned $30.1 million in the quarter, or 37 cents a share. That compared with a $279.3 million loss a year earlier, the result of a loss the company took on the sale of its Minneapolis newspaper.

Earnings from continuing operations totaled $33.2 million, or 40 cents a share, compared with a year-ago profit of $76.9 million, or 94 cents a share. The latest earnings were reduced by 9 cents a share because of additional tax expenses. If those costs are factored out, McClatchy earned 49 cents a share, or a penny higher than the consensus estimate of Wall Street analysts, according to Thomson Financial.

The quarter's revenue fell nearly 15 percent, to $573.4 million. The decline was exaggerated because the fourth quarter of 2006 had an extra week. Eliminating that extra week, revenue fell 9.1 percent.

Gary Pruitt, McClatchy's chairman and chief executive, said the company will continue to reduce expenses where it can, but the short-term advertising outlook remains troubling.