Gannett Q3 down, but not as bad as expected


Broadcasting was the bright spot in Q3 as Gannett reported revenues for the division up 3.9%. $50 million from political and Olympics advertising boosted broadcasting revenues to $197 million, up $7.5 million from a year ago – so some quick math shows that core business remains weak. Meanwhile, newspaper revenues plunged 14.4% to $1.36 billion, with pro forma ad revenues down 14.9% in the US and 23.6% in the UK. As bad as that was, Gannett’s earnings, excluding one-time severance costs, were 76 cents per share, a penny better than Wall Street had expected.

Gannett executives took some flack from analysts in their quarterly conference call for announcing that the company would not longer issue monthly revenue statistics, which has been standard practice for public companies in the newspaper sector. “We are not running our company on a month to month basis,” said CFO Gracia Martore, who insisted that analysts will be receiving plenty of information from Gannett in its quarterly reports. For Q4 the company says broadcasting revenues are expected to be up in the low single digits, led by strong political demand.

CEO Craig Dubow said political ad buys are coming in on target, if not even a little better than expected. Martore said Gannett had budgeted for $50 million in Q4 political revenues and as of Friday’s report the TV group was pacing 2% ahead of expectations. But she noted that political buys can be very volatile.

Dubow was asked for more details on weak and strong TV sectors in Q3. “Overall, as we have been saying, that the critical areas, particularly in automotive there’s been a double-digit decrease, and that has been fairly consistent across the quarter. Packaged goods have also been down in a similar range, along with telecommunications. So, as we have been suggesting through the quarter, those core, or key areas, have had a significant downside. And then, obviously, that’s been offset in a very, very significant way from the political and also from the Olympic spending that did occur,” he said.