McClatchy shows slight profit

SACRAMENTO, Calif. —The McClatchy Co. reported a first-quarter profit today and said its advertising slump is easing.

The newspaper conglomerate, which owns The Eagle, recorded a net loss from continuing operations, but that included one-time charges related to a major refinance of its loans. Without those charges, McClatchy earned $4.8 million from continuing operations compared with a loss of $22.9 million a year earlier. Its bottom-line net income came to $2.2 million, or 3 cents a share, compared with a $37.5 million loss a year ago.

McClatchy said advertising revenue fell 11.2 percent from a year earlier, and total revenue was down 8.2 percent to $335.6 million. Executives with the Sacramento newspaper chain called that a marked improvement from last year, when ad revenue was plunging as much as 30 percent. As recently as last fall, ad sales were off 20 percent.

"We saw improving advertising revenue trends in the first quarter of 2010," chairman and CEO Gary Pruitt said in a news release. He said online advertising sales grew 2.2 percent "and continue to lead the company in advertising performance."

"Even though we expect advertising revenues to be down in the second quarter, we believe the ad trend will continue to improve."

McClatchy, like many other newspaper companies, is emerging from a devastating downturn in advertising that forced major cuts in staffing and other expenses. McClatchy's cash expenses fell $69 million in the first quarter, or 21 percent, not counting severance costs.

"We expect that continued favorable revenue trends and stringent cost controls will allow us to at least maintain if not grow cash flow from operations in 2010," Pruitt said.