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McClatchy Reports Q4 $1.4 Billion Loss on Big 'Goodwill' Gesture

Magazine article Editor & Publisher

McClatchy Reports Q4 $1.4 Billion Loss on Big 'Goodwill' Gesture

Article excerpt

The McClatchy Co. reported Thursday that it incurred a $1.43 billion after-tax loss on the fourth quarter of 2007 -- after taking yet another huge goodwill impairment charge.

McClatchy said its loss from continuing operations of $17.42 per share -- which compares to a $3.40 per-share loss in the same period in 2006 -- includes a non-cash after-tax impairment charge related to goodwill and flagging newspaper mastheads of $1.47 billion.

The impairment charge on goodwill and other non-tangible assets -- reflecting a loss in the fair market value of the nation's third-largest newspaper chain -- follows a goodwill write-down of $1.4 billion in the third quarter of 2007. The swoon in McClatchy stock, which has lost more than half its value since the Knight Ridder deal, made the impairment charges inevitable, and CEO Gary Pruitt had warned more than a month ago that a Q4 charge was coming.

In effect, McClatchy has written off half the value of the $4.4 billion blockbuster purchase of Knight Ridder in the summer of 2006.

The impairment charge includes a write-down of $1.39 billion to goodwill, and $166.6 million to newspaper mastheads, McClatchy said.

McClatchy said Thursday its loss from continuing operations for all of 2007 was $2.73 billion or $33. …

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