McClatchy Staff Layoff; Chiquita Plunges

123jump.com Staff
16 Jun, 2008
New York City

McClatchy Company stock fell to a 10-year low after it reported a sharp decline in revenue and announced a layoff of 1,400 staff. The local newspaper publisher has struggled as advertisers spend less in the print media and prefer lower cost alternative on the Internet. McClatchy consolidated revenue in May fell 15.1% and advertising revenue declined 16.6% compared to a year ago. For the year-to-date revenue declined 14.2% to $833 million from $972 million a year ago.

[R]2:45PM New York – McClatchy announces job layoff of 1,400 people as revenue in the month of May and first five months declined. Chiquita Brands International sales volume declines and it estimates loss in the third quarter.[/R]

McClatchy Company stock ((MNI)) fell 17 cents to $7.97 to a 10-year low after it reported a sharp decline in revenue and announced a layoff of 1,400 staff. The local newspaper publisher has struggled as advertisers move advertising dollar away from the newspapers and to Internet businesses.

McClatchy consolidated revenue in May fell 15.1% and advertising revenue declined 16.6% compared to a year ago. For the year-to-date revenue declined 14.2% to $833 million from $972 million a year ago. Advertising revenue in every market that it operates in declined in the month of May and declined for the year to date so far.

McClatchy through outsourcing has reduced 14% of its staff between the end of 2006 and April of 2008 and in May decided to restructure the business and layoff equivalent of 1,400 of full time positions.

The company hopes to save $70 million through staff reduction as it plans to save $100 million in overall expenses on an annual basis.

The publisher of Miami Herald, Charlotte Observer and Sacramento Bee has seen its stock price decline from $76 in the late 2004 to below $8 today.

Chiquita Brands International stock ((CQB)) plunged 29% to $6.76 to $16.57 after it reported its monthly price and volume statistics. The banana and fresh lettuce and salad wholesaler reported that May sales volumes were flat and lower in North America and Europe respectively.

The company also guided “significant loss” in the third quarter before returning to “normal” profit in the fourth quarter.

The company revised its full-year cost increase by $60 million to $65 million to new total of between $240 million and $265 million. The fuel hedging forwards will generate $42 million in savings compared to earlier estimate of $30 million during 2008.

The sales volume in North America rose 1% where company sells 45% of banana fruit but sales declined 11% in the European Union territory where it sells 35% of banana.

The banana prices in North America increased 36% and in European markets increased 8% in euro currency and 26% in the U.S. dollar. In Asia Pacific and the Middle East prices increased 17% and sales volume increased 25%.

In the salads and healthy snacks segments net revenue per case increased 1% and volume increased 1%.