The McClatchy Company today reported profits of $42 million for Q2 2009, or 50 cents per share, despite analysts claims that today’s earnings report would show a loss of 8 cents per share and drive the company further toward bankruptcy.
Even after adjusting for “unusual items,” earnings remain high, at 30 cents a share or $25.2 million, up 42.9 percent from the same period last year.
Revenues were $365.3 million this quarter, down 25.4 percent from revenues in the same period last year.
The earnings, then, come primarily from cost-cutting measures; in March 2009, McClatchy laid off 15 percent of its workforce, suspended its company 401(k) match, and froze its pension plans. (The company’s compensation costs for Q2 2009 were almost $100 million less than its costs in Q2 2008.) In May, the company reduced its debt by about $100 million thanks to a complex debt exchange.
McClatchy chairman and executive officer Gary Pruitt looked ahead for the company. Advertising revenues were still down this quarter but “we saw an improving trend,” he said, adding that each of the company’s newspapers is “contributing positive cash flow.”
Online, the company ain’t doing so bad either: visitors to McClatchy-owned sites were up more than 30 percent this quarter and online advertising revenue grew by 24.7 percent. Digital advertising made up 16.5 percent of advertising in the quarter, up from 11.8 percent in Q2 2008.
McClatchy still has a large amount of outstanding debt, mostly from its 2006 purchase of Knight Ridder, but none of it is due until 2011. That buys the company a little more time.
The McClatchy company owns 30 daily newspapers, including its flagship The Sacramento Bee, the Miami Herald, the Fort Worth Star-Telegram, and more.