McClatchy ad rev decline slows, shares jump

(Reuters) - Newspaper publisher McClatchy Co's quarterly results handily beat expectations, as the pace of decline in advertising revenue reduced sharply and expenses fell about 8 percent.

Shares of the company jumped as much as 27 percent to a seven-month high of $2.85 in morning trade on Tuesday, making the stock the biggest percentage gainer on the New York Stock Exchange.

The shares have gained 17 percent since the company reported third-quarter results on December 7, excluding today's gains.

McClatchy, which publishes the Miami Herald, the Sacramento Bee and the Kansas City Star, gets 90 percent of its total revenue from advertising.

The company, like many of its peers in the newspaper industry, has seen circulation and advertising revenue plummet as readers switch from print to digital media.

Fourth-quarter ad revenue fell 5.7 percent, but the decline was only about half the nearly 10 percent recorded in each of the first three quarters in 2011.

Improving retail and national advertising trends, and higher digital sales, helped slowdown the decline.

Last week, rival New York Times Co said it continued to add subscribers for its digital products in the fourth quarter and reported that its new digital subscription strategy helped circulation revenue grow modestly.

"Much of the improvement in the ad revenue trend occurred in November, but each of the months in the fourth quarter of 2011 was better than the trends through the first nine months of the year," Chief Executive Gary Pruitt said.

Fourth-quarter net income from continuing operations rose to $42 million, or 49 cents per share, compared with $15.7 million, or 18 cents per share, a year ago.

Revenue fell 5 percent to $351.4 million.

Operating expenses fell to $261.2 million.

Analysts had expected the company to earn 40 cents per share, on revenue of $347.8 million, according to Thomson Reuters I/B/E/S.

(Reporting by Sayantani Ghosh and Monika Shinghal in Bangalore; Editing by Unnikrishnan Nair)