NEW YORK (AP) _ McClatchy Co. swung to a loss in the first quarter as a weakening economy and competition from online rivals led to a 15 percent plunge in advertising revenues at its newspapers.

McClatchy said Wednesday it saw the problems continuing into the second quarter, though it expected the declines to moderate.

Investors dumped shares in the Sacramento, Calif.-based company, pushing them down 57 cents, or 6.4 percent, to close at $8.30 Wednesday. Earlier in the day the stock touched a new 52-week low of $7.93. Its peak for that period is $34.32.

The company, which publishes The Miami Herald, The Sacramento Bee and the Fort Worth Star-Telegram, lost $849,000, or a penny per share, in the three months ended March 30 versus earnings of $9 million, or 11 cents per share, a year ago.

Excluding charges and discontinued operations, McClatchy earned $1.6 million, or 2 cents per share. That was 2 cents below analysts' estimates and compared with $14.5 million or 18 cents per share a year ago.

McClatchy also announced an offer to buy back as much as $250 million in debt, and said it hoped to reduce its debt load from the current level of $2.4 billion to about $2 billion at the end of the year.

Revenues fell 13.8 percent to $488.3 million, while advertising revenues fell 15.3 percent to $404 million.

Like other newspaper publishers, McClatchy has been reeling from a double blow of an economic slump brought on by the collapse of the housing bubble as well as stiff competition from online rivals like Craigslist to its lucrative classified advertising business.

McClatchy has been especially hurt by the concentration of steep real estate declines in California and Florida, since it owns papers in both those states.

Chief Executive Officer Gary Pruitt told investors on a conference call that while Florida and California made up only a third of the company's revenues, those markets accounted for 56 percent of the declines in the first quarter.

Pruitt said the advertising environment continued to be weak, with second-quarter revenues likely to be down in the low to mid-teen percentage range.

McClatchy became the third-largest newspaper publisher in the country when it bought Knight Ridder Inc. two years ago for $4.1 billion. Since then, advertising revenues have deteriorated across the industry, triggered mainly by the real estate-riven economic slump.

McClatchy's classified advertising, which is particularly sensitive to economic swings as well as competition from online rivals, fell 25.7 percent in the quarter.

McClatchy's online advertising revenues from its own newspaper Web sites continued to grow, but not nearly fast enough to make up for the sharp declines in print.

Online ads grew 10.6 percent in the quarter to $45.6 million, and now make up 11.3 percent of McClatchy's total advertising revenues, compared with 8.6 percent for all of 2007.

Copyright 2008 The Associated Press.