Debt Refinancing Cause For 83% Drop In Earnings, McClatchy Declares

Debt-Refinancing-McClatchy

The McClatchy Co, parent company of the Miami Herald, suffered an 83% drop in profits compared to previous results for the second quarter. The newspaper publishing company had to put up with higher costs on debt in order to recover from a prominent ad slump.

According to McClatchy CEO, Gary Pruitt, “While the economic recovery hasn’t been robust or smooth, we believe it is beginning to spread across the markets we serve.” However, inspite of the decrese in net income of 83%, the low 8% decrease of its ad revenue proved to be a point of relief.

The shares for McClatchy have left investors not all that happy, as they went down by 4% to $3.57 on Thursday. The reason for the economic slump for the publishing companies in terms of marketing revenue was something that had been occuring for them since 2007, and was the result of cheaper online alternatives, as well as a change in readership habits.

The refinancing of debt by the publisher has helped somewhat, as they have been able to extend their repayment schedule.