Earnings: Gannett Prelim Q4 Results Show Profits Drop 36 Percent, Billions In Writedowns


imageGannett (NYSE: GCI) released its preliminary earnings and the news was just as poor as the rest of its newspaper industry peers. Profits fell 36 percent to $158 million EPS was $0.69 per share versus $1.06 per share last year. Part of that was due to $56 million in pre-tax severance expenses ($36.1 million after tax or $0.16 per share) related to the 3,000 layoffs across its 80 local papers during the quarter. Overall, the company’s total writedowns are expected to range from $4.5- to $5.2 billion after taxes due to the economic downturn. Revenues on preliminary basis fell 10.5 percent to $1.7 billion from $1.9 billion, missing estimates set by analysts polled by FactSet, who forecast $1.8 billion, Marketwatch reported.

On the digital front, operating revs totaled $169.9 million in the quarter — compared to $23.7 million last year — thanks to the consolidation of CareerBuilder, ShopLocal and social media tech company Ripple6, which the McLean, VA-based company bought in November. The interactive division’s results were also affected by shifting other subsidiaries PointRoll, Planet Discover and Schedule Star from the publishing segment to digital segment.

Publishing revs were $1.4 billion, down 17.6 percent from Q407’s $1.7 billion. Ad revs in the segment fell 22.7 percent to $963.4 million versus $1.2 billion last year. Individually, ad revs dropped 17.7 percent in the U.S. and declined 29.3 percent in pounds at Newsquest, Gannett’s UK unit. Lower classified revenues were driven by declines of 45.7 percent in real estate, 47.5 percent in employment and 30.4 percent in automotive. The situation wasn’t much better across the pond, as UK classified revs slid 35.3 percent lower, with 57.7 percent drop in real estate, 35.2 percent fall in employment and 31.2 percent auto ad spend.

— Over at Gannett flagship USA Today, ad revs sank 18.5 percent in Q4, while paid ad pages totaled 788 compared with 1,045 in the same quarter of 2007.

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