McClatchy shares hit a new 52-week low today after reporting third quarter earnings that missed estimates by 2 cents a share. Both advertising and circulation revenues continued to fall. And check this out:

“Cash expenses were down 8.6% as the result of reduction in staffing levels, lower newsprint expense and continued vigilance in all other expenses.”

That sounds like fun. And more the same is expected for next quarter as well. Management blames the real estate downturn in Florida and California. If so, Florida should start to improve next year — much of the excess is being wrung out of that market. California, that will take longer.

The 4th quarter has already been written off, it seems, which leaves the first quarter of 08 as a make-or-break time for the newspaper chain. Maybe political campaign spending will ride to the rescue.