McClatchy Trims Guidance

Publishing company McClatchy (MNI Quote - Cramer on MNI - Stock Picks) saw its third-quarter profit slide as weak automotive and retail sector advertising continued to hit the newspaper industry.

For the quarter ended Sept. 25, McClatchy earned $38.6 million, or 82 cents a share, down from the year-ago $39.1 million, or 83 cents a share. On an adjusted basis, excluding costs related to a circulation lawsuit filed against the company, latest-quarter earnings were 84 cents a share, 2 cents better than the Thomson First Call analyst consensus estimate.

Sacramento, Calif.-based McClatchy publishes the Sacramento Bee and Minneapolis' Star Tribune. It said revenue rose 2.1% from a year ago to $292.6 million, as advertising revenue rose 3.2% to $247.4 million and circulation revenue fell 3.8% to $40 million.

The company noted litigation expenses in the third quarter related to an internal investigation surrounding a circulation lawsuit at its Star Tribune paper. The company said it completed an investigation of circulation figures there and won't restate any of them.

"We are generally pleased that we were able to report a solid quarter in a tough advertising environment," McClatchy Chairman Gary Pruitt said in a statement. "We expect earnings in the fourth quarter to range between 98 cents and $1.00 per share. Litigation expenses related to the circulation lawsuit are not anticipated to be material in the fourth quarter." Analysts surveyed by Thomson were expecting a fourth-quarter profit of $1.03 a share.

McClatchy was set to open Tuesday trading at $64.09.