The McClatchy Company reported Q3 income of $23.5 million, sharply lower than last year’s $52.6 million. Revenue slipped 9.2 percent to $540.3 million from $595.1 million, the result of a 9.8 percent decline in advertising revenue to $457 million from $506.7 million. The company says it was hit hard at its California and Florida newspapers, where the real estate market is particularly poor. Weakness was mitigated, in part, by cost cutting — largely staff reductions. This quarter’s income may be adjusted further downward to reflect a goodwill impairment charge, although the company specifically noted that such charges are non-cash.
Release | Webcast
Update: On the conference call, management spent some time discussing the company’s interactive business, which has underperformed compared to industry peers. For the quarter, online advertising grew by only 1.4 percent, though it claims that like-for-like comparisons are difficult due to the way Knight-Ridder calculated this business. Looking forward, it expects online ad growth to grow in the double digits. Specific verticals behaved differently, with online automotive revenue growing by 20 percent, while online real estate slipped by 5.8 percent, owing to the aforementioned economic conditions. Online employment revenue grew by just1.7 percent, but it expects this number to pick up, since it’s maintaining its CareerBuilder stake and expanding its use of the service. The company didn’t disclose any financials related to the industry-wide partnership with Yahoo, which it joined earlier this year, although it did indicate that its seeing online traffic benefits. Altogether, the company claims year-over-year traffic gains of 15.4 percent to its sites.