The AP reports - - -
McClatchy Co., the nation's third-largest newspaper publisher, said Tuesday it is suspending its quarterly dividend after paying out its dividend for the first quarter of 2009 so it can save up cash to repay its debts.
The publisher of papers such as The Miami Herald and The Sacramento Bee said it declared a quarterly cash dividend of 9 cents payable on April 1 to shareholders of record on March 11.
But the company said in a news release that after that, the dividend would be suspended "for the foreseeable future" so it could conserve its cash.
McClatchy, like others in the newspaper industry, is seeing a decline in advertising revenue which is hurting profit. Advertisers have been pulling back amid the recession, and increasingly shifting their marketing dollars to the Web.
McClatchy said its first-quarter dividend is worth half the per-share dividend paid in the same period last year.
Shares of McClatchy rose 2 cents, or 2.4 percent, to close at 85 cents.
Advertisers were shifting their dollars to the Web long before this recession started.
They were following readers who were abandoning McClatchy newspapers.
The market understood this even if McClatchy’s top execs have denied it for years.
As recently as five years ago, McClatchy traded in the mid-70s.
In March 2006 when the economy was still growing, McClatchy traded in the mid-40s.
So what did McClatchy do?
CEO Gary Pruitt, ignoring the clear warning his company’s 40%+ stock price decline signaled, went out and bought the Knight-Ridder chain.
McClatchy's taking on more newspapers then was as smart as a captain of a sinking ship taking on more anchors.
In less than five years McClatchy has dropped from the mid-70s to penny stock status with Pruitt and other top execs getting performance bonuses all along the way.
Can you believe that?
All I can say tonight is pity the small shareholders and the many honest, able people who work for McClatchy.
Any wonder they are so angry?
Hat tip: Louisiana Wise Man
Tuesday, January 27, 2009
The AP reports - - -
Posted by JWM at 10:11 PM