7:45 p.m., June 29
Surprise! Newspaper Stocks Leap on Cost Cutting
Newspaper stocks have soared this week, as companies report better earnings, largely from cost-cutting. Today, Media General, owner of Tampa Tribune, 24 dailies and 250 other publications, reported that it earned $20.3 million in the second quarter, compared with a $532.2 million loss a year ago. Operating expenses dropped 23 percent from the previous year. The company claims that advertising declines are easing. Stock of the company, which also owns TV stations, has almost doubled today to $4.54.
Another winner is beleaguered McClatchy. On Monday it reported a second quarter profit of $42 million, more than double the profit of the same period last year. Since Monday, McClatchy stock has more than doubled from 54 cents to $1.14.
Gannett, the largest newspaper chain, reported moderately better results last week. Its stock has gone from $3.49 on July 14 to $5.29. Caution: for any kind of company, gains from cost-cutting are very difficult to repeat. Media (particularly newspaper) revenues may be only slightly better.
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