Slump in Print Classified Advertising

The McClatchy Company, the newspaper publisher, reported yesterday that profit fell in the quarter because of a slump in classified advertising, dropping below Wall Street expectations. Read original article

Shares of McClatchy fell 95 cents, to $30.55.

The results mirror those of other newspaper publishers.

McClatchy’s first-quarter net income fell to $9 million, or 11 cents a share, from $27.7 million, or 59 cents a share, in the quarter a year ago. Earnings excluding losses from The Star Tribune of Minneapolis, which was sold in March, were 18 cents a share.

According to Reuters estimates, McClatchy’s earnings before special items were 22 cents a share, below analysts’ average forecast of 27 cents.

Revenue rose to $566.6 million from $194.5 million a year earlier because of the acquisition of Knight Ridder. But on a comparable basis, calculated as if Knight Ridder had contributed to the 2006 quarter, revenue fell 5 percent.

On that basis, advertising revenue fell 5.3 percent while circulation revenue dropped 3.6 percent.

National advertising fell 10.4 percent, hurt by losses in the telecommunications and national automotive categories.