The McClatchy Co. said Friday that its profits fell to $98,000 in the second quarter as it continued to wrestle with the transition to a digital media strategy and the continued drop in revenue from print.
Sacramento-based McClatchy, which owns The Kansas City Star, The Wichita Eagle, The Sacramento Bee and 26 other newspapers, said the results were preliminary and would be adjusted downward after the company calculated a non-cash impairment charge to reflect declining values of its assets and the recent slump in its stock price. The charge will be reported no later than Aug. 7.
McClatchy’s second-quarter results compared with net income of $89.9 million, or $1.02 a share, a year earlier, when the company posted big gains from the sale of its share of the Apartments.com website. Setting aside the Apartments.com gains, McClatchy’s operating income in the quarter fell to $11.5 million from $27.3 million.
Total revenue fell 7.7 percent to $269.4 million, and advertising sales fell 12.5 percent from a year earlier. Digital ad revenue fell 1.8 percent. But digital-only ad sales, which aren’t tied to sales of print ads, rose 5 percent.
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The latest results show McClatchy is still in the midst of a decade-long decline in print revenue as the newspaper industry and other traditional media cope with increased competition from the Internet and other sources.
McClatchy in the past year has undertaken a significant reorganization in an effort to speed the progress toward a digital-first strategy, and on Friday president and CEO Pat Talamantes said the company is “on track to achieve the $25 million to $30 million of cost savings” it aimed for in 2015.