The McClatchy Company (MNI), like other newspaper publishers, continued to reap the benefits of its investment in online business during the third quarter. The owner of the Sacramento Bee and Miami Herald said online advertising sales rose 16 percent in the quarter to $47.1 million from $40.5 million in 3Q05. For September, online ad revenue hit $15.4 million, up 20 percent from $12.8 million over the same month last year. The online revenues helped the bottom line which was affected by costs associated with its purchase of the Knight-Ridder chain. Net income overall was $51.8 million, or 64 cents per share, compared with $38.6 million, or 82 cents. Sales jumped to $680.9 million, helped by the inclusion of the new Knight-Ridder papers.
-- Among issues that affected 3Q06: KR sold part of its interest in CareerBuilder.com for $310 million, using the proceeds to pay down the KR debt. McClatchy retains a 15 percent stake.
-- On the print side, classified and national showed “worsening trends.” CEO Gray Pruitt said in the release: “Online and direct marketing revenues continued to show strength and their growth helped offset some of the weakness in classified and national advertising.” He said he expects that also to be the case in the fourth quarter, with its signs of a slowdown.
Reuters: During his conference call with analysts and investors, Pruitt said he has no interest in either buying the troubled Tribune Co. or in going private as some analysts have suggested.
Update: From the conference call via SeekingAlpha transcript:  Pruitt on acquisitions: “So the focus, rather than on acquiring additional papers, will be on operating well and paying down debt. That will be our focus for the next couple years. It does not mean we will not be making selected investments in strategic Internet opportunities or opportunities to fill out our local media strategy, be it niche publications or direct mail, but I do not think you should look for McClatchy to be in the hunt for a major newspaper acquisition in the near term. That is really not our focus right now.”
-- Chris Hendricks, president of McClatchy Interactive, on local search: “We are finding that the small business are very interested in keywords. They do not have the management capacity to go ahead and constantly monitor those keywords, so we are actually selling services through a company called Web Visible that allows us to manage that for them. So far, we are seeing bright results. In one market, we are averaging 30,000 a month, and it is growing steadily, and just managing the relationships with Yahoo!, our own local search initiatives, Google, and other search engines that are out there for people managing the keywords on those sites.” He also said MI is seeing “We are seeing banner increases, significant banner increases, keyword search increases, ROP conversions and directory space.”
-- Hendricks said 40 percent of the company’s online business is online only; that segment is up 51 percent year over year.
Earnings | Webcast (Replay) | Transcript (SeekingAlpha.com)