Earnings preview: McClatchy to post 3Q results

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NEW YORK (AP) — Newspaper publisher McClatchy Co.’s third-quarter earnings should shed more light on how much the ongoing newspaper advertising slump is affecting the company.

WHAT TO WATCH FOR: McClatchy’s financial results, expected Friday, will follow Gannett Co. on Monday and The New York Times Co. on Thursday. Newspaper ad revenue has been falling as more advertisers and readers migrate to the Internet.

Although McClatchy and other newspaper companies have made inroads, bringing in Internet advertising revenue, this has not been enough to make up for reductions in print ad revenue.

McClatchy, in particular, has suffered more than some of its peers because two of its largest papers, The Miami Herald and The Sacramento Bee in California, are in markets that have been especially hit hard by the downturn in real estate. This, along with weak auto sales, has hurt newspaper print advertising.

For McClatchy, further revenue losses could mean more staff cuts.

On Monday, Gannett reported a slight decline in its third-quarter net income, but the results matched analysts’ expectations.

WHY IT MATTERS: Stemming the decline in print ad revenue would make it less likely that McClatchy will have to lay off more workers and cut back its news coverage. The company cut 540 jobs in the first quarter, leaving it with 7,240 full-time positions at the end of March. CEO Gary Pruitt said after the company’s second-quarter earnings report that there will be more cost-cutting, but he didn’t say whether this would include another round of layoffs.

WHAT’S EXPECTED: Analysts polled by FactSet are expecting earnings of 7 cents per share.

LAST YEAR’S QUARTER: McClatchy reported net income of $11.9 million, or 14 cents per share. Stripping out one-time items, earnings came to 12 cents per share. Revenue fell 6 percent to $328 million. Most of the company’s revenue comes from advertising.