If the publishers' share prices continue to plummet, "going out to buy a newspaper" could take on a whole new meaning.
The examples are legend: From New York Times (NYSE: NYT) and Gannett (NYSE: GCI), to Media General (NYSE: MEG), the nation's fish-wrapper purveyors are all well off their highs of the past few years. Belo (NYSE: BLC) has been dismembered, and, as we learned on Thursday, McClatchy (NYSE: MNI) continues to struggle.
Indeed, in the most recent quarter, McClatchy was forced to take an after-tax charge of $1.47 billion. As a result, the company lost $1.43 billion, or $17.46 per share, compared to a loss of $279.3 million, or $3.40 a share, for the same period a year earlier. The latest quarter's charge followed a similar write-down in the third quarter. But to give credit where it's due, the numbers indicate that the company was profitable from a purely operating perspective (i.e., excluding the charge).
The company, which owns The Miami Herald, The Sacramento Bee, and The Charlotte Observer, along with a portion of the CareerBuilder job site, saw its revenue slide by about 15% in the December quarter. Advertising revenue was down by a similar percentage.
As CEO Gary Pruitt noted at the time of the release, "It's important to understand that this non-cash charge does not reflect our view of the long-term health of the newspaper industry ..." The company's share price fell by 37% in the fourth quarter alone.
So, in the face of their companies' plight, newspaper executives are involved in a desperate push to transition to online entities. But with the newer media generally representing a small percentage of their revenue, the changes might not occur rapidly enough. However, none of this stopped Pruitt from saying, "We believe investors should focus on the more important fundamentals of our business." And: "We ... are quickly moving to become a successful hybrid print and online news company."
As an erstwhile journalism prof, I sincerely wish Mr. Pruitt and his minions the best. Nevertheless, I trust that my Foolish friends will see fit to deploy their investment pesos elsewhere.
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