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The McClatchy Company Message Board

  • newspaper_advertising newspaper_advertising Aug 31, 2012 11:23 AM Flag

    August Revenue trending up over last year

    from the papers we follow and track, through Wednesday, ad revenues are up 2.5% approx over last year. Increases are running in preprints in several markets, the auto biz is strong, and real estate has picked up ever so slightly in Cali and Florida. Should this trend continue through the next six weeks then this would surely lead to a pop in stock prices. Let's see if we can get confirmation from the company on this issue.

    Sentiment: Hold

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    • Not sure this is the right indicator to judge the long-term health of the company, or whether the stock price goes above, or further below, two bucks.

      I am hardly trying to say I am the only person with the following analysis, but falling print circulation bothers me a lot more.

      As real estate markets ebb and flow -- and automotive and even the broader consumer economy do the same thing -- it is certainly is to be expected that lineage and revenue trends will do the same thing short and medium term. But long term, if the readers aren't there, the advertising will trend to go away, and that is what will control the financial health and the stock price.

      The exception is if the revenue model can SUCCESSFULLY be adapted to electronic products of the company, and so far I still am not convinced.

      As for circulation, just as one example, here in Wichita (hardly MNI's biggest player, but historically a sound paper) ABC is now listing M-F circulation as down to 67,250, which is down by many, many thousands in just a few years. (McClatchy's web site still lists daily M-Sa at 88,502 -- I don't think the website is trying to deceive -- it's just that things are falling that quickly.)

      If that trend continues, who will want to advertise? -- even though short term (measured a whole lot less scientifically than NewspaperAdvertising does it) I think I am seeing an increase in ads.

      Multiply that by the rest of the country and, until the electronic products can pull in decent-margin revenue, I just don't see how the trends NewspaperAdvertising is seeing (even they well may be accurate) are going to revive the company or its share price.

      Sentiment: Strong Sell

    • Your previously reported they were off 4% in July, on ad revenues. If they are up 2.5% in August, and, if by some miracle, they are up 2.5% in September, that blended rate would put them SLIGHTLY positive for the entire quarter.

      If they achieve such a thing, shouldn't that send the stock back up over $2?

      Jay, how accurate have your measurements of ad revenue been, in the past, when the actual figures come out with the earnings release?

      • 1 Reply to longtimefollower
      • Longtime, most of the quarters we are off by less than 2% of the total revenue predictions. We usually miss on the right side. These revenue predictions are always posted here and can be verified with a search. The one component that is becoming harder to track is the invisible revenue. This can be online revenue. It can be revenue that is in preprints going to non-subscribers. Both of these segments are growing, which is good.

        The auto business has been solid and we see it in the page counts of ads in all papers. Newspapers still deliver great results today for auto dealers. Smart dealers are increasing their ad buys in print and it is still trackable and effective.

        I would not be surprised to see a follow thru to $2 and higher by the end of the year. I am not buying any more stock as I have enough and would like to see a move up from here.

        Sentiment: Hold

    • Are you buying more MNI...or waiting for "confirm"?

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