Cost Cuts Boost Publisher McClatchy's 3Q Earnings

MICHAEL LIEDTKE

SAN FRANCISCO (AP) — Newspaper publisher McClatchy Co. rode a wave of traumatic cost cutting and a one-time tax adjustment to a higher third-quarter profit, overcoming yet another jarring decline in revenue.

The owner of The Miami Herald and 29 other dailies is the first major newspaper company to detail its earnings for the summer period. Thursday's report showed that McClatchy's main source of revenue — advertising sales — is still unraveling at an alarming rate, even as the annual comparisons are getting easier.

What's more, the company said the dismal trends are continuing so far this month, and it projected another substantial drop in the current quarter.

McClatchy shares fell 52 cents, or 13 percent, to close at $3.50. The shares had surged in the summer on hopes that the worst of the recession is over for the newspaper industry.

Investors are more concerned with McClatchy's steadily shrinking revenue than they are impressed with the publisher's ability to remain profitable by shedding expenses.

The company said it earned $23.6 million, or 28 cents per share. That compares with $4.2 million, or 5 cents a share, a year ago.