Excluding special items, Gannett reported a Q2 net profit of 46 cents per share, a dime better than Wall Street had expected. TV ad revenues weren’t down quite as much as the newspaper side, and the company reported some signs of hope in TV ad sales.
Total revenues were down 17.8% for the quarter to $1.41 billion, with newspaper ad revenues plunging 32% to $753.1 million.
Broadcasting revenues, including the Captivate in-elevator video service, declined 20.6% to $153 million. TV revenues were down 19.7% to $148.4 million. But CFO Gracia Martore, who is heading the company while CEO Craig Dubow recovers from surgery, noted that retransmission consent fees tripled during the quarter to $143 million and that Gannett’s TV group is on track to book $55 million of retrans cash this year.
July on the TV side looks a bit better than June, which in turn was a bit better than May. “It appears to us that some of the advertisers that have been sitting on the sidelines are starting to dip their toes back into the waters. And auto is showing a little bit of a sign of life,” said Martore. She noted that Q3 is up against tough comps from political and the Olympics last year. Gannett’s TV pacings are currently down in the mid-20s, she said.
The newspaper business is in a “deep recession,” Martore acknowledged early in her conference call with analysts. She said the company’s cash flow for the quarter reflected the impact of staff cuts and other reorganization efforts. Even with substantial cost cuts, operating cash flow for publishing fell 48.3% to $175.3 million and by 33% for broadcasting to $59.9 million.