S&P upgrades McClatchy, man bites dog
McClatchy’s third-quarter financial results could have been written last quarter, or two quarters ago… or last year. Short story: Ad revenue plunged some more, the company is doing everything it can to pay debt, online revenue is rising but not by enough, [insert here boilerplate paragraph on newspaper grappling with financial crisis/cyclical trends/slow decline of industry] and so on.
What a day for S&P Equity Research to say that it’s upgrading McClatchy to a “hold” from a “sell.” Here’s what it said:
MNI reports Q3 adjusted EPS from continuing operations of $0.13 vs. $0.31, in line with our $0.12 estimate. On a GAAP basis, loss per share was $16.42. Revenues declined 16%, with advertising falling 16% and circulation off by 5%. On a positive note, online ads grew 9%, representing 12% of total ad revenues. With a restructuring plan in place for $100 million in annual savings, and MNI’s success with its credit amendment, we are increasing our 12-month target price to $5.00 from $3.00. We lift our opinion on MNI shares to hold from sell.
Does this mean they can bring back some of those thousands of people they’re getting rid of?