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Earnings: Gannett Q3 Profits Drop 32 Percent; Revs Slide 8.9 Percent

imageGannett’s profits and revenues were down again in Q3, with total operating revenues slipping 8.9 percent to $1.64 billion from last year’s $1.80 billion. Net income meanwhile fell 32 percent to $158 million ($0.69 per share) from Q307’s $234 million ($1.01 per share), reflecting the woes its newspaper peers have been experiencing lately as revenue from ads and circulation plummet and the company acts to rein in costs. Gannett (NYSE: GCI) recently said it would eliminate 1,000 staff positions, including 600 layoffs, for a 3 percent reduction in its workforce. Analysts estimates gathered by Thomson Reuters (NASDAQ: TRIN) expected the USA Today parent to post a gain of 75 cents per share and revenue of $1.61 billion, AP reported in its earnings preview.

Digital: While noting the trouble on the print side, Gannett’s earning statement attempted to highlight some of the more positive news on the digital front. Like most newspaper companies who are still experiencing growth from their respective internet properties — albeit at a slower rate, these days — digital revenue ballooned to $77.5 million in Q3 from $17.1 million. Again, impressive numbers, but certainly not enough to stanch the losses elsewhere. As for a review of some of Gannett’s digital moves during the quarter, the company acquired all of its partners’ ownership stakes in comparison shopping site ShopLocal and took an additional 10 percent stake in CareerBuilder, increasing its ownership to 50.8 percent. While the company publishes 100 websites, mostly related to its newspaper and broadcast properties, the real money makes were CareerBuilder, along with ShopLocal and rich media ad firm PointRoll.

Publishing: Publishing segment operating revenues were $1.36 billion for the quarter, a 14.4 percent decline from Q307. Ad revenues were $977.1 million compared to last year’s $1.19 billion in the third quarter of 2007. Also typical of its larger peers like McClatchy (NYSE: MNI), the fall in classified revenues were driven by declines of 41.5 percent in real estate, 34 percent in employment and 21.4 percent in automotive. Overall, advertising revenues were 17.6 percent lower.

USA Today: Gannett’s flagship saw ad sales decline 7.1 percent in Q3 compared to the year ago quarter. Paid advertising pages totaled 713 compared with 803 in the same quarter of 2007.

Release (PDF) | Webcast (10:00 AM EDT) | Transcript