Not to flog this dying horse, but the Associated Press’ follow-up story about McClatchy’s third-quarter statement has language that makes it clear why the publisher’s stock dropped so precipitously after the earnings report.
AP Business Writer Michael Liedtke uses such phrases as “traumatic cost cutting,” “jarring decline in revenue,” “dismal trends” and “alarming rate,” the latter to describe the “unraveling” of advertising revenue.
Newspaper publisher McClatchy Co. reported a profit over the last three months Thursday, based on an $11.2 million adjustment for tax miscalculations made earlier in the year and cost savings from eliminating some 5,000 positions over the last 12 months. But its revenue for the period shows a drop of more than $104 million, or 23 percent, from the same time last year.
McClatchy shares fell 52 cents, or 13 percent, Thursday to close at $3.50. The stock fell to $3.24 in after-hours trading Friday.
“Investors are more concerned with McClatchy’s steadily shrinking revenue than they are impressed with the publisher’s ability to remain profitable by shedding expenses,” Liedtke writes.