Despite Late Year Drop, McClatchy Leads Newspaper Stock Performance

By Douglas A. McIntyre Updated Jan 12, 4:15PM EST · Published Dec 31, 9:40AM EST

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Despite Late Year Drop, McClatchy Leads Newspaper Stock Performance — © Thinkstock

Debt-laden newspaper company McClatchy Co. (NYSE: MNI) pulled itself off the penny stock list with a midyear one-for-10 stock split in June, and then posted impressive gains until well into the year. Despite a late year sell-off, it led newspaper stocks in what was a 2016 of generally dismal performance.

McClatchy shares rose almost 10% to $13.18. They were higher by over 60% in July. The company has a small market cap of $100 million, due primarily to a long-term debt load of $843 million, and pension and postretirement (their spelling) obligations of $527 million. In the quarter that ended September 26, revenue was $235 million, down from $251 million in the same period of 2015. McClatchy had a net loss of $9.8 million, compared to $1.1 million the year before. Much of the poor result was due to interest expense of $21 million.

New York Times Co. (NYSE: NYT) stock closed the year up 2% at $13.30. The company’s relative strength in the industry, particularly due to its huge paid digital subscription base, helped shares rally from an annual low in November to close the year with a market cap of $2.1 billion. Its third-quarter results were unimpressive. Revenue dropped 1% to $364 million. Net income dropped 97% to $406,000. However, The New York Times added a large number of subscribers just after the election. From November 8 to November 26, management said the paper had an increase of 132,000 paid subscriptions to its products.

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Tronc Inc. (NASDAQ: TRNC), formerly known as Tribune Publishing, was involved in a bruising M&A battle with larger rival Gannett Co. Inc. (NYSE: GCI) through much of the year. Tronc shares were up 25% for 2016 in October, when Gannett appeared ready to raise its bid to close a buyout. The deal did not materialize. The stock closed the year flat at $13.87. Tronc has a market cap of $505 million. In the third quarter, it posted revenue of $308 million, down from $406 million in the same period the year before. Tronc had a loss of $10.4 million, compared to $8.6 million.

Gannett’s efforts to buy Tronc where partially to blame for a drop of 37% drop in its shares to $9.71. This gave it a market cap of $1.1 billion. Some investors also blamed poor third-quarter results. Revenue was $772 million, and Gannett lost $24 million, against a profit of $39 million in the same quarter a year ago.

The S&P 500 was up 11% this year. On that basis, newspaper stocks had a rough year.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.