No ads mean bad news in the newspaper industry, and McClatchy Newspapers
Declining circulations and weak advertising sales have haunted the industry for some time now. A few biggies like The New York Times
McClatchy, with a total daily circulation of 1.4 million, publishes 12 daily and 17 non-daily newspapers, including the Minneapolis Star Tribune and the Anchorage Daily News. Since the industry sees the Internet as a source of strength, it's no surprise that McClatchy has also established websites in each of its daily newspaper locations.
A glance through McClatchy's second-quarter results sheds light on newspaper publishers' current woes. Advertising revenue growth remained in the low single digits at 3%, while circulation revenues declined 3% compared to the year-ago period. Total sales were $302.8 million, a mere 2.2% higher.
For the period, the company earned $44.2 million, up 10.2% compared to a year ago. Through the first six months of fiscal 2005, it has earned $1.63 per share. By year's end, McClatchy anticipates bringing in between $3.45 and $3.55 per share.
Investors may be hesitant to sample this stock, given the above concerns and the company's forward P/E of 19. Nonetheless, McClatchy has been a steady performer since 1996. Its recent price weakness may just be the time to look at this investment a little closer.
Read on for more Foolishness:
- Many newspapers continue to lose subscribers.
- So what's the future of newspapers?
- Are blogs the answer?