Stockhouse.com: Taking it to the street
Latest Broadcasts
SWEB
Internet/Technology
V.UNR
BASIC MATERIALS - METALS & MINING
V.PTV
BASIC MATERIALS - ENERGY
SKYLINE
Investor Relations
CMIN
Basic Materials – Metals & Mining
TPIM
Healthcare
An excellent place to start your search for new investments!
add to favorites print

Revenue shrinks and asset values decline for McClatchy.

McClatchy (NYSE: MNI, Bullboard) is the third largest publisher of newspapers in the US and it's in trouble. It borrowed money to buy rival chain Knight-Ridder and now has almost $2.5 billion on its balance sheet. As the value of the assets it bought has dropped it has posted two large write-offs.

Two or three years ago, it would not have been conceivable that a large newspaper chain could become insolvent, but this year that is what happened to MNI peer Journal Register which was pushed from a listing on the NYSE to the bulletin boards.

In the last quarter, MNI's revenue took a sharp drop from $477 million last year to $404 million in Q1, 2008. The company had interest expense of over $45 million. Operating income dropped from $87 million to $57 million and that drop is likely to continue.

The company's revenue is still shrinking at 10% or so year-over-previous year, so it is not hard to imagine that it could have problems with debt service over the next few quarters.

The stock is down to $9.50 from a 52-week high of over $30. But, it still may be one of the great shorts available.

ABOUT THE AUTHOR
From the news desk of 24/7 Wall St.

This report was prepared by 24/7 Wall St., LLC exclusively for Stockhouse. 

 
print
 
Comments
Well its becoming harder and harder to fit the battle of electrics vs text.
This company must be facing some serious issues, as I find it hard to believe that solely market value conditions caused two large complete write-offs (you would think that dropping asset value would cause write-downs).
Stockhouse Conflict and Disclosure Policy:

Stockgroup Media Inc., owners and operators of Stockhouse.ca/com, has established rules to ensure that there is no appearance of impropriety on the part of any Stockhouse writers who discuss or name individual public companies in the content published on the Stockhouse websites. The content of Stockhouse Editorial articles are the opinion of the writer and any reliance on the content of these articles shall be at your sole risk.

Stockhouse Editorial writers may own, buy, or sell shares in public companies mentioned in their articles. Please be advised that a conflict may exist and that any investment decisions you make are your own responsibility. Additionally, our Editorial writers are not registered investment advisors. You should not make any kind of investment decision in relation to these articles or stocks discussed in them without first obtaining independent investment advice from a registered investment advisor.

Facts relied upon by our Editorial writers in arriving at their opinions are generally provided by the subject companies or gathered by our Editorial writers from other public and/or private sources. These facts may be in error and if so, the opinions of our Editorial writers may be materially different.

Rules applying to Stockhouse Editorial Writers

Stockhouse Editorial writers may own stock of any company they cover, but at the bottom of the article or within the article they must clearly and prominently state their ownership position in the company.

Stockhouse Editorial writers cannot solicit, accept, or agree to receive anything of value given or paid with the intent of influencing their editorial articles published on Stockhouse.

Stockhouse Editorial writers are not permitted to write articles that attempt to influence or benefit persons connected to the writer such as family or friends, , except where disclosure is made in the same way as if the writer him/herself owns stock.

Stockhouse notifies each Editorial writer about these rules but in case of a possible breach of our rules, we may not be in a position to find out or investigate the facts. We rely on the integrity of our writers to ensure that our rules are followed.

 
FREE REPORTS
 
SPONSORED NEWS LINKS
 
 
 
 
Today's Feature  
 
EAST WEST RESOURCE CORP
East West Resource Corporation is a Canadian junior resources company, listed on the TSX-V under the trading symbol - EWR. The company is based in the City of Thunder Bay, Northwestern Ontario, a regional centre for mining and mineral exploration services and a major transport hub at the head of the Great Lakes with direct links by road, rail and water to the worlds smelting and refining infrastructure...