NEW YORK - McClatchy Co. swung to a fourth-quarter profit from a loss a year ago, but the newspaper publisher continued to be buffeted by a severe housing slump in California and Florida.
The company said it would take an accounting charge to reflect further declines in its stock price.
McClatchy, which is the third-largest U.S. newspaper publisher by circulation, said the advertising outlook for 2008 wasn't any better, and now expects first-quarter advertising to decline in the low double-digit percentage range.
McClatchy reported preliminary net income of $30.1 million for the final three months of the year, compared with a loss of $279.3 million in the same period a year earlier. That included losses from the Minneapolis Star Tribune, which McClatchy has since sold.
The latest figures did not include the expected non-cash impairment charge, which McClatchy said it would announce later when it submits its annual regulatory filing.
CEO Gary Pruitt told investors on a conference call that the write-down was coming because of accounting rules that require companies to adjust the carrying value of their assets, a formula that is heavily affected by a company's stock price.
McClatchy had already taken a previous impairment charge of $1.4 billion for its third quarter to reflect its falling share price and poor conditions in the industry, but its share price has continued to slide since then, losing about half its value from the end of the third quarter.
Like many other newspaper publishers, McClatchy's shares have been badly beaten down in recent months over investor concerns about vulnerability to a slowing economy and more advertising losses to online rivals.
However, after a long streak of declines, McClatchy's shares ended slightly higher Wednesday, closing up 19 cents, or 1.8 percent, to $10.54.
Pruitt said the company's businesses were seeing a pronounced cyclical impact from the downturns in California and Florida, and its papers there accounted for two-thirds of the company's revenue loss for 2007.
McClatchy's earnings were equivalent to 40 cents per share on a continuing operations basis, which included an additional tax expense of 9 cents per share. Accounting for that item, the earnings were a penny ahead of analysts estimates of 48 cents per share, as compiled by Thomson Financial.
In the same period a year ago, the company's net loss was $3.40 per share. Without the one-time losses, earnings from continuing operations were 94 cents per share.
Revenues fell 15 percent to $573.4 million. The year-ago period included one more week than the most recent quarter. Without that effect, revenues fell 9 percent, the company said.
Pruitt also said that Yahoo Inc. offered reassurances that an arrangement it has with McClatchy and other newspaper publishers to cooperate on online advertising would survive even if Microsoft Corp. succeeds in its $31 per share bid for the Internet company.
On a full-year basis, McClatchy reported a net loss of $1.27 billion or $15.52 per share, which included the earlier write-down of $1.4 billion, versus a loss of $155.6 million for 2006.
Full-year revenues rose to $2.26 billion from $1.68 billion, reflecting the addition of 20 newspapers the company bought from the former Knight Ridder Inc. Assuming the company owned the same set of papers in both years and adjusting for the extra week in 2006, revenues would have been down 7.9 percent, with advertising revenues down 8.6 percent.
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