The McClatchy Co. on Wednesday reported higher adjusted earnings for the fourth quarter despite a continued decline in revenue.
Sacramento-based McClatchy, which owns The Fresno Bee and 28 other daily newspapers, said its advertising revenue continued its decadelong slide, although it said it was encouraged by growth in digital advertising.
Adjusted earnings for the quarter grew to $17.3 million, compared with $11 million a year earlier. Those figures don’t include one-time items, notably the $347.5 million gain McClatchy recorded a year earlier from the sale of its share of automotive website Cars.com.
Total revenue fell 7.8 percent, to $292.8 million, when the one-time items were excluded. Advertising revenue dropped 11.7 percent, driven mainly by the “further decline in print-related revenues,” the company said. The slide was exacerbated by “tepid growth in retail sales” and a softening U.S. economy, the company said.
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Pat Talamantes, McClatchy’s president and chief executive, said the results show the company is making progress in its evolution to a digital-first media company. Digital ad revenue from national advertisers, while a relatively small segment of the total, shot up 36 percent, offsetting the decline in print.
“We sure like the growth we’re seeing on the digital side,” Talamantes said on a conference call with investment analysts.
However, Talamantes declined an analyst’s invitation to predict when all digital advertising sales will be strong enough to offset the drop-off in print – the point he jokingly referred to as “the holy grail.” Ad revenue has shrunk at practically all newspaper chains and other traditional media as they struggle with the transition to the digital age.
Meanwhile, the company reduced expenses by 9.4 percent in the quarter.
For the quarter, including the impact of the Cars.com transaction and other one-time items, McClatchy profits fell to $8.8 million, or 10 cents a share. That compared with a year-ago profit of $302.6 million, or $3.47 a share.
For all of 2015, McClatchy reported adjusted earnings of $11.8 million, up from $7 million in 2014. However, net income for the year came to a loss of $300.2 million, or negative $3.47 a share. That figure included a previously reported non-cash “impairment charge” to reflect declining values of McClatchy’s assets.
McClatchy shares closed at 89 cents, down 5 cents, on the New York Stock Exchange.