McClatchy Gains on S&P's Upgrade
NEW YORK (
) --
McClatchy
(MNI) - Get Report
shares were gaining nearly 8% in Thursday afternoon trading after
Standard & Poor's
raised its corporate credit rating on the newspaper publisher to B from B-.
In a research note, S&P Credit analyst Hal Diamond wrote that improving ad sales trends will result in a "recovery" in McClatchy's full-year 2010 earnings before interest, taxes, depreciation, and amortization.
To be sure, the print advertising business remains in decline. But the severe, years-long ad recession appears to be moderating. Diamond said McClatchy's total revenue could decline at a single-digit percentage rate in 2011. In 2009, the company's revenue fell by about 23% year-over-year. In the third quarter, the decline was 5.7%.
A recovering advertising market in general will help McClatchy improve its debt leverage, S&P said.
S&P added that its business risk profile for McClatchy remains "weak," reflecting its reliance on print ad revenue.
Thursday afternoon, the stock was up 7.8% to around $5. More than 1.9 million shares had changed hands, compared with daily average volume of around 986,000.
-- Written by Theresa McCabe in Boston.
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