SACRAMENTO, Calif. (AP) — The McClatchy Co. said Thursday that its first-quarter loss widened, as the newspaper publisher paid off part of its debt ahead of schedule and advertising revenue declined.
McClatchy lost $12.7 million, or 15 cents per share, compared with a loss of $2.1 million, or 2 cents per share, during the same period a year ago. In the most recent quarter, McClatchy booked an after-tax loss of $8.1 million as part of a refinancing that repaid nearly $84 million in debt. McClatchy ended the quarter with debt of $1.57 billion, compared with $1.71 billion at the end of last year.
Revenue fell 4 percent to $277 million, from $288 million. That was modest progress from the first quarter of 2012, when revenue decreased 5 percent from the prior year.
McClatchy, which publishes The Sacramento (Calif.) Bee, The Miami Herald and 28 other daily newspapers, is trying to bring in more money from digital products by requiring paid subscriptions to previously free websites. That started last September and helped boost circulation revenue in the first quarter to $67.5 million, an increase of nearly 2 percent from a year earlier. McClatchy ended the quarter with 22,000 digital-only subscribers.
But McClatchy is still being hurt as advertisers curtail their spending on print. The company's print advertising revenue fell by 8 percent, or $13.3 million, to $150 million, while digital advertising revenue increased by less than 2 percent, or $705,000, to $47 million.
The results were the latest reminder of the challenges that newspaper companies face as readers and advertisers shift away from print publications to digital alternatives on desktop computers, smartphones and tablets. Newspapers are still reaching large audiences on their websites and mobile apps, but they aren't yet bringing in nearly enough digital revenue to make up for what they have lost in print.
Like many other publishers, McClatchy has tried make up for declines in revenue by cutting staff and other expenses. Some of those cost-cutting measures, including moving The Miami Herald to a less expensive location, resulted in one-time charges that added to the first-quarter loss.
Excluding those charges and the debt-related loss, McClatchy would have lost $663,000, or 1 cent per share, compared with an adjusted loss of $2.5 million, or 3 cents per share, a year earlier.
Without providing a specific number, CEO Pat Talamantes said he expects the current quarter to show further signs of the revenue slump easing, in part because of the digital subscriptions.
That seemed to raise investors' hopes for a long-awaited turnaround. After the release of results, McClatchy's stock increased 22 cents, or 9 percent, to close Thursday at $2.66.