Gannett Q3 Profit Down 40%, But Tops View; Revenues Miss

(RTTNews) - Media holding company Gannett Co., Inc. (GCI), the publisher of USA Today, on Monday reported a 40 percent decline in profit for the third quarter from last year, reflecting lower advertising sales at the company's publishing and broadcasting segments.

However, adjusted earnings per share beat analysts' expectations, while revenues missed their estimates. The company's shares are down more than 4 percent in the regular trading session.

Segment-wise, Gannett's publishing segment revenues for the third quarter declined 4 percent from the year-ago period to $858.08 million, as results were impacted by softer advertising demand and circulation revenue comparisons due to the roll out of the All Access Content Subscription Model last year.

Advertising revenue decreased 6 percent, as secular pressures as well as the relatively tepid pace of economic growth continued to impact advertising demand. Circulation revenue edged down 0.6 percent, reflecting an increase in circulation revenue of over 1 percent at local domestic publishing operations that were impacted by the All Access Content Subscription Model.

Broadcasting segment revenues, which include Captivate through September 25, 2013, declined 14 percent to $203.36 million. The decrease reflects the cyclical absence of $75 million of Olympic and political advertising that generated incremental revenues in the prior-year period.

Meanwhile, digital segment revenue increased 5 percent to $191.4 million, due primarily to higher revenues at CareerBuilder. Company-wide digital revenues increased 12 percent and now comprises 30 percent of total revenue.

Gannett, the McLean, Virginia-based publisher of 82 U.S. daily newspapers, reported net income for the third quarter of $79.75 million or $0.34 per share, down from $133.08 million or $0.56 per share in the year-ago period.

The latest quarter's results include special items totaling $20.1 million after tax or $0.09 per share, reflecting charges associated with workforce restructuring, facility consolidation and the Captivate transaction.

The prior-year quarter's results include special charges of $10.9 million after tax or $0.05 per share, offset by a tax benefit of $13.1 million or $0.06 per share related primarily to a tax settlement covering multiple years.

Excluding special items, adjusted earnings for the latest quarter were $99.80 million or $0.43 per share, compared to $130.91 million or $0.56 per share in the previous-year quarter. On average, six analysts polled by Thomson Reuters expected the company to report earnings per share of $0.41 for the quarter. Analysts' estimates typically exclude one-time items.

Operating revenues for the quarter declined 4 percent to $1.25 billion from $1.31 billion in the same period last year. Analysts had a consensus revenue estimate of $1.27 billion for the quarter.

In Monday's regular trading session, GCI is trading at $26.22, down $1.27 or 4.62 percent on a volume of 261,080 shares.