In her first quarterly conference call as CEO, Gracia Martore reported Q3 results for Gannett Company which were right in line with expectations. As you would expect, television had a better quarter than newspaper publishing, even before adjusting for the cyclical impact of political advertising.
Total operating revenues were down 3.5% to $1.27 billion in Q3 – right in line with the Thomson/First Call consensus. Likewise, earnings per share, excluding special items, totaled 44 cents, also right on target.
Broadcasting revenues were down 6% to $174.3 million, but Martore proudly noted that revenues were up nearly 5% if you exclude the incremental impact of political advertising, which amounted to over $21 million a year earlier. She said automotive was back in gear in September, following the Japan supply chain problems, up more than 20% for the month. Broadcasting cash flow was down 9% to $75.7 million (with no adjustment for political).
Looking to the current Q4, while it is still early Martore said broadcasting revenues are pacing to be down in the “very low teens.” But excluding political that’s a gain “in the very high single digits to perhaps 10-11%” she said.
Gannett executives were careful to point out that publishing remains profitable for the world’s largest newspaper company. Operating cash flow was $146.8 million in Q3. How did that compare to a year ago? We had to look it up and do the calculation. It was a decline of over 15%.
Q3 publishing revenues were down 5% to $917.8 million with advertising revenues down 8.5% to %91.7 million. US ad revenues were down 9.3%, with the UK down 7.9%. US retail ad revenues fell 6.3%, national was down 17.3% and classifieds fell 9.4%.
Digital was a bright spot, with revenues up 10.3% to $173.9 million, with CareerBuilder credited for strong growth. Digital segment cash flow gained 16.8% to $42.1 million.
RBR-TVBR observation: One analyst jokingly offered Martore “condolences” on taking the top post at the company. It is certainly challenging to run a large media company in the current economic environment, but Martore can certainly hit the ground running as CEO. She had been the #2 for some time and ran the company while Craig Dubow was on his first medical leave. She was already in charge again when he made the second medical leave permanent and the board promoted COO Martore to CEO.