McClatchy charge at $1.37 billion

McClatchy Co. pinpointed the size of a previously announced accounting charge at $1.37 billion Thursday, pushing the newspaper company to a loss in the third quarter.

In October, the publisher had announced it would take a charge to reflect the poor conditions in the newspaper business and its falling share price, but it did not specify the amount.

McClatchy, whose papers include the Miami Herald, the Charlotte Observer and the Sacramento Bee, reported a loss of $1.35 billion, or $16.40 a share, for the third quarter, including the charge.

Excluding that item, McClatchy earned $23.5 million, or 29 cents, as reported Oct. 16. That compared with a profit of $51.8 million, or 64 cents, in the same period a year earlier.

Chief Executive Gary Pruitt said the write-down was because of a “challenging business environment, coupled with the drag on our stock price.”

McClatchy said about one-third of the charge was due to a decline in the value of its stock, which was used as part of the payment to acquire Knight Ridder Inc. last year.

Pruitt noted that the accounting charges did not involve any outlay of cash, and “nothing about them changes our operations or our ability to reduce debt.”

He said that with many operations in California and Florida, McClatchy has been especially affected by sub-prime lending problems, which have greatly affected those regions.

Shares of McClatchy gained 5 cents to $15.87.