Earnings Preview: Gannett Stock May Be Up, But Q1 Profits Look Down

imageGannett (NYSE: GCI) is ending the week before its Q1 earnings report on a high note, with its stock up nearly 40 percent to $3.75 on Thursday. But the company has been laying the ground for what has been shaping to be a painful report. An analysts consensus from FactSet Research anticipates the McLean, Va.-publisher of USA Today to post a per-share profit of $0.28 on revenue of $1.47 billion, Marketwatch reported. Last year, Gannett posted what at the time looked like a fairly weak Q108 profit of $0.84 on $1.7 billion in revenue.

You’ve been warned: Gannett has already warned that it was facing a 30 percent decline in ad sales for the most recent quarter. The company also told investors that it expects to end 2009 with $100 million in capital expenditures. The company has been trimming staff by the thousands since last year and has continues to cut salaries by slashing wages and an imposing unpaid furloughs.

Vote of confidence: While those cost-saving efforts haven’t really done much for the stock lately, the share price got a boost from two announcements this week. In an SEC filing on Thursday, Gannett announced that investor Ariel Capital Management increased its stake in to roughly 12.5 percent of Gannett’s outstanding shares — more than double its previous 4.9 percent holding. Ariel is known for investing in companies it views as undervalued, so the increase in its holdings was viewed as a strong vote of confidence. Secondly, Gannett got some breathing room on its debt payments. In an 8-K filing, Gannett said it extended some of its notes due next two years out to 2015 and 2016.

Comments have been disabled for this post