NEW YORK (Reuters) - U.S. newspaper publishers, including Tribune Co. and McClatchy Co. , posted lower quarterly earnings on Thursday due to circulation declines and the loss of advertising to the Web.
Along with Media General Inc. and Journal Register Co. , they reported a drop in ad revenue from the auto industry and other national advertisers. Higher newsprint costs and the lure of free online news painted a bleak picture for the rest of the year, analysts said.
"(Earnings) for the rest of the year are probably going to be flattish at best," said media consultant John Morton.
Tribune, publisher of the Los Angeles Times and Chicago Tribune, said second-quarter net income fell 63 percent to $85.7 million, or 28 cents a share, with losses from its sale of two television stations also weighing on earnings. National ads revenue dropped 7 percent, Tribune said.
Net income edged 0.2 percent lower at McClatchy to $44.1 million, or 94 cents a share, after auto and help-wanted ad sales declined.
While some advertising dollars are migrating to the Internet, the overall spending environment for national advertisers including retailers and movie theater companies is also restrained due to economic uncertainties, analysts said.
"I think what may be happening is advertisers are becoming very sensitive to short-term business trends and are willing to raise or lower ad expenditures very quickly," said Benchmark Co. analyst Edward Atorino. "If you're Macy's and you have a bad month, you turn off the ad budget."
Newspaper publishers reported increases of about 30 percent for online ad revenue, but the segment remains a small portion of total revenue and could not offset the print declines.
The results depressed stock prices throughout the newspaper sector, including shares of Dow Jones & Co. Inc. , and New York Times Co. , which report earnings next week.
Shares in Tribune fell 2.6 percent, Journal Register fell nearly 1 percent and Media General, which publishes the Richmond Times-Dispatch in Virginia, fell 6.8 percent.
Journal Register's net income fell 36 percent to $9.8 million, or 25 cents a share. The company said its auto classified revenue dropped 19 percent. The overall market closed lower on Thursday with the Dow Jones industrial average losing 1.52 percent to close at 10846.29.
One bright spot for publishing shares was McClatchy, which rose 1.7 percent as its results beat Wall Street expectations.
On Wednesday, the largest U.S. newspaper publisher, Gannett Co. Inc. , owner of USA Today, posted an 8 percent fall in profit due to weakness in its British newspaper business and higher newsprint costs.
