McClatchy advertising dips sharply, reports $11.3 million loss for quarter
Newspaper company says advertising revenue fell 12 percent in Q1 of 2015, though digital advertising grew 3.1 percent
The publisher of the Sacramento Bee, The McClatchy Company, today reported Q1 earnings and said advertising revenue fell 12 percent in the quarter.
“Our revenues in the first quarter were impacted by the continued decline in print retail and national advertising, particularly among large advertisers. To help offset advertising trends, we are undertaking a number of initiatives that involve incremental expense at the start of the projects, but which should be more than offset by cash flow benefits in the future,” Pat Talamantes, McClatchy’s president and CEO, said. “The first quarter is our seasonally lowest quarter for revenues, which magnified the impact of those expenses on our bottom line. Still, even with those incremental costs, our expense performance improved compared to recent quarters and as we expected, our debt reduction last November enabled us to reduce interest costs by $11 million in the first quarter.”
Digital advertising grew somewhat, up 3.1 percent, but overall digital was impacted by the sale to Gannett of the digital properties Cars.com and others, which infused the sellers with cash, but is now impacting revenue. In the meantime, Gannett, which will move the digital properties into its new broadcast company called TEGNA, was able to report stronger revenue thanks to the acquisitions. The sellers are a bit in a bind as they have signed agreements to continue to support the digital brands.
McClatchy’s results in the quarter were impacted by severance charges totaling $4.2
million, though operating cash expenses, excluding severance and certain other charges declined 3.2 percent.