Gannett is still assessing its big writedown announced last month, so technically its quarterly numbers are preliminary… The USA Today parent reported Q2 revenue of $1.79 billion, down 9.9 percent from $1.91 billion in the year-ago quarter. Income from continuing operations fell 19.7 percent to $232.7 million ($1.02 per share) from $289.8 million ($1.24 per share). Ad revenue at the core publishing business was down 13.5 percent to $1.1 billion. The classifieds category, not surprisingly, was hit the hardest, dropping 18.7 percent. On digital, the company offers a couple data points: Online broadcast revenue was up 17.1 percent, though it doesn’t give a baseline, nor does it give an equivalent number for publishing. It says in June it had 23.1 million unique visitors across its network of sites. We’ll see if they offer more on the call…lots more and the call after the jump..
As for the goodwill writedown, its expecting after-tax charges somewhere in the $2.4-$2.7 billion range. One other note: Gannett (NYSE: GCI) says it purchased 581,000 of its own shares in the quarter and 2.1 million year-to-date. While share repurchases reduce the float (boosting EPS) and signal confidence, given the performance of its shares — down over 55 percent year-to-date — these purchases haven’t been a successful use of capital. Update: The stock is getting whacked further after this report, trading down another 10 percent this morning.
Conference call: Still no nominal figures, but CEO Craig Dubow said on the call that total digital revenue was up almost 6 percent in the quarter, with publishing up revenue up around 3 percent. The message: digital is not immune to economic woes, particularly in areas like employment and autos. Following the company’s recent acquisition of the rest of ShopLocal, the company was asked about its acquisition strategy.
— Deals: CFO Gracia Martore was asked what the company planned to do with its free cash flow, and whether it planned to buy up any other newspapers: “At this point, we’re focused on two things: Number one, as we demonstrated with ShopLocal, and a number of other pieces that we’re looking at, we are very interested in doing good, strong, strategic acquisitions…. when you look at the current environment, particularly with the credit markets, which have become, I think, very difficult, we’ll be focused on those kind of acquisitions, as well as paying down debt in the short to intermediate term.” So basically, it doesn’t sound like buying other newspapers is in the plan.
— Commoditization of content: An analyst posed a broad, theoretical question about the role of newspapers, the commoditization of content, and the pluses or minuses of portals. Without going too deep, Dubow’s basic answer was: Local, local, local and moms.
Pic courtesy: Nats.