The McClatchy Co. reported sharply higher fourth-quarter profits Tuesday, thanks to cost cutting and an easing of the newspaper chain's revenue downturn.
McClatchy, which owns The Bee, also benefited from millions of dollars in dividends from its investments in Internet companies.
Surpassing Wall Street's expectations, the Sacramento chain said income from continuing operations rose to $43.2 million from $33.5 million a year earlier.
Bottom line net income, including one-time adjustments, was up even more dramatically: McClatchy earned $42 million, or 49 cents a share, vs. $14.8 million, or 17 cents a share, in the fourth quarter of 2010. The year-ago results were depressed by a big non-cash write-down of some Florida real estate.
Perhaps the most important number McClatchy reported was its revenue, which fell 5 percent in the latest quarter to $351.4 million.
Ad sales dropped 5.7 percent. That was the smallest decline since the first quarter of 2007, the early days of a horrendous recession. Just a few months ago, McClatchy's ad revenue was falling by about 10 percent compared to the year-earlier period.
"We are successfully navigating through this difficult environment," Chairman and Chief Executive Gary Pruitt told investors. He said McClatchy will continue to pay down its debt, now at $1.64 billion, "until the company is absolutely bulletproof."
McClatchy and other media companies haven't completely escaped the effects of a so-so economy and heightened competition for advertising and readers. McClatchy's January ad revenue fell nearly 8 percent. Pruitt said that was to be expected in light of the big run-up during the holidays.
"We were not surprised to see the momentum slow somewhat in January," he said.
He didn't make a forecast about the rest of the quarter.
In the fourth quarter, McClatchy cut expenses by 9 percent. It earned $28 million in dividends from online ad firms such as Cars.com.
Analysts expected profits of 40 cents a share and revenue of $347.8 million. McClatchy beat those projections, and investors drove the stock to $2.72, up 48 cents, on the New York Stock Exchange.
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