As a recent transplant from Florida to the Carolinas, I regretfully sympathize with newspaper publisher McClatchy (NYSE:MNI), which had its bell wrung in the past quarter by, among other things, the Sunshine State's wounded real estate market. Indeed, Florida's market, where the company's properties include The Miami Herald, teamed up with California's own stellar housing market to dampen McClatchy's profits for the period.

For the quarter, the company earned $39.9 million, or $0.49 per share, compared to $44.1 million, or $0.94 per share, in the same quarter of 2006. The big drop in the per-share figure was the result of the company's issuing 35 million shares of common stock at the time of its acquisition of Knight Ridder last year, which was the nation's second-largest newspaper publisher.

McClatchy's revenues in the June 2007 quarter were $580 million, compared to $212 million. The big difference there was the addition of the 20 Knight Ridder papers that it kept after the acquisition. But had the company owned the same newspaper group in both periods, total revenues would have fallen 8.3%.

Along with other newspaper companies, such as Gannett (NYSE:GCI), Tribune (NYSE:TRB), and Media General (NYSE:MEG), McClatchy's decline in advertising in the quarter was hardly moderate. For instance, its retail ad sales were down 6.2%, while national and classified advertising revenues fell 9.4% and 14.9%, respectively.

But despite these results, the company's shares actually closed $0.13 higher on Thursday following the release. How is that possible? Simply because the dart throwers in the analysts coterie covering the company had anticipated that McClatchy's per-share earnings would come in at about $0.42 for the quarter. It was, I suppose, yet another example that a company's underlying trends matter less than analysts' expectations at earnings time.

Here's hoping that Fools were not among those who pushed McClatchy shares higher on Thursday. The company's management is working diligently, and somewhat successfully, to control costs. But with advertising woes intensifying among U.S. dailies, this group is hardly a place for my Foolish friends to cast their investment lots these days.

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Fool contributor and resident journalism professor/curmudgeon David Lee Smith doesn't own a single share of any of the companies mentioned. He welcomes your thoughts or questions. The Motley Fool's disclosure policy is read worldwide.