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Gannett Beats Analysts’ Estimates; Weakness In Publishing, Digital Abates

Digital revenues declined slightly for Gannett (NYSE: GCI) in Q1, suggesting that while a recovery is not exactly in full swing, things are looking up, even for newspapers. It should be pointed out that digital revenues were largely pulled down by Careerbuilder, which continues to struggle amid a still-miserable job market. Meanwhile, total national advertising dollars were down just 2 percent for the McLean, VA,-based company, which posted net income of $119.4 million — more than double the $57 million in Q109. Revenues were down 4.1 percent $1.3 billion. The publishing segment appears to have rebounded, as lingering weakness in classifieds and other categories eased up a bit. Publishing revs declined only 7.1 percent compared to the 21 percent drop last year during the same period. Lastly, broadcasting also helped prop up Gannett in Q1, as the segment gained 16.7 in revenues from the Olympics.

Digital: Digital revs slipped 1.8 percent to $140.6 million. While Careerbuilder was the negative part of Gannett’s digital mix, the other units within the digital segment appeared to have done better. In particular, Gannett claims that rich media unit PointRoll doubled while ShopLocal, Planet Discover, Schedule Star and Ripple6 were all positive as well. The segment now makes up 17.1 percent of all Gannett’s revenues.

One of the key aspects for Gannett’s return to profitability last year was the ability to make severe cost costs, which resulted in the loss of hundreds of jobs across its newspapers. In Q1, the company showed it could still hold the line on costs, as adjusted operating expenses declined $141.3 million or 11.3 percent. Aside from growing revenues, the big challenge for the company is being able to maintain the lower cost model over the course of this year. More to come after the webcast at 10:00am ET.

Updated: In addition to touting the calming of Gannett’s troubled ad waters and discussing plans to institute a subscription structure for USA Today’s iPad app, CEO Craig Dubow also used the call to promote some other digital efforts. It’s been over a year since the launch of Gannett’s local/national web hybrid ContentOne initiative, and Dubow announced plans to create “jobs/economy portal” under that effort. The ContentOne portal will collect job advice columns, info-graphics from USAT, videos from Gannett Broadcasting and data from the CareerBuilder job search module.

Dubow also talked about joint venture with 11 other broadcast companies to set up a mobile TV network. So far, there are a number of prototypes for the mobile broadcast network that the group, which also includes Belo (NYSE: BLC), Cox Media Group, E.W. Scripps (NYSE: SSP), Fox, Hearst Television, Media General (NYSE: MEG), Meredith (NYSE: MDP), NBC and others, is looking at, Duvow said. He sounded impressed by the Tivit, which works directly with the iPhone and is “about half the size of a smart phone… that works through Bluetooth.” While the Tivit is selling well in Japan, it’s only in the development stage in the U.S. It’s possible that the broadcasters group could help accelerate those efforts.

At one point, Dubow was asked what the real meaning of all these digital undertakings were having on the bottom line. Would the revenues from rich media and electronic editions “move the needle?”
Without taking anything away from the core print business, Dubow insisted that digital is already meaningful. “When you look at the portfolio we have, it goes far beyond just e-readers. I think as we have said before, we