Both TV and newspapers grew Q2 operating profits at Gannett


Revenues were up for broadcasting and digital in Q2 for Gannett, but down again for the newspaper division. Nevertheless, all divisions grew their operating revenues in Q2.

“We continued to make progress on our goals to provide engaging, relevant content any way the consumer wants while also expanding our reach and offering better solutions for our advertisers,” said Chairman and CEO Craig Dubow. “Our strong results this quarter reflect very positive revenue trends for our Broadcast and Digital segments and moderating revenue declines in Publishing as we continued to close the revenue gap in the quarter. Stronger core advertising demand and increased political spending drove revenue growth in Broadcasting while positive revenue results at CareerBuilder and PointRoll contributed to revenue growth in the Digital segment. In our Publishing segment, this quarter was the best comparison quarter for advertising revenues since mid-2007. We benefited from continuing efficiency efforts company-wide as well as lower newsprint expense. As a result, we generated substantially higher profitability and operating cash flow in all of our business segments,” he added.

Television division net revenues rose 20.3% to $184 million. That was attributed to a gain of more than 60% in automotive advertising, double-digit increases in retail and package good and a $9.9 million jump in political spending from a year ago. Operating income for the division rose 56% to $78.4 million and operating cash flow rose 44.5% to $86.5 million.

“Based on current trends, we expect the percentage increase in television advertising revenues to be in the mid-twenties for the third quarter of 2010 compared to the third quarter of 2009. However, it is early in the quarter to gauge results, particularly for political spending which will be placed primarily late in the quarter,” the company said.

Providing additional detail in the company’s conference call with Wall Street analysts, President and COO Gracia Martore said the current TV pacings are pushing toward the upper 20s, although she cautioned that political is the big variable.

Newspaper ad net revenues declined 5.7% for Q2 to $692.2 million. By segment, retail dropped 6.1%, national 2.7% and classified 4%. Circulation was also down, dropping 5.9% to $270.1 million. Even so, publishing division operating income rose 20.8% to $180.3 million and cash flow gained 23.3% to $214.6 million.

Digital division (CareerBuilder, PointRoll, ShopLocal, Planet Discover, Schedule Star and Ripple6) net revenues grew 8.3% to $154.1 million. Operating income increased 49.4% to $27.5 million and cash flow gained 30.1% to $35.5 million. Gannett also noted that when digital revenues from the TV and newspaper divisions were added in, digital revenues grew 9.7% in Q2 to $252.2 million and now account for almost 19% of total company revenues.