The television segment at Gannett did better, with revenues down only 15.7%. Newspaper advertising revenues plunged 34.1%. Including one-time charges, net income plunged 59.5% for the quarter to $77.7 million. What about the current quarter?
Gannett, like so many other media companies, is no longer offering detailed forward guidance. However, CEO Craig Dubow did tell Wall Street analysts that Q2 is currently pacing down in the high teens.
As difficult as Q1 was – he referred to it as the worst quarter in memory – Dubow noted that Gannett still produced $230 million of operating cash flow. “While revenue in the quarter benefited from growth in our digital segment and significantly higher retransmission fees for our television stations, our results reflect the pressure on advertising demand across all of our business segments due to continuing recessions in the U.S. and the UK. Our results, however, highlight the positive impact of the company’s efforts to operate its businesses as cost efficiently as possible in light of the revenue realities we are facing in this extraordinary time,” said Dubow.
The company’s broad-based one-week furloughs for non-union employees in Q1 are so far being extended only to managers in Q2. Dubow called the unpaid furloughs an effective strategy for cutting costs.
Broadcasting revenues declined 15.7% in Q1 to $143.5 million. That was attributed to softer ad demand, particularly in the automotive and retail categories, and the near absence of political advertising, which had been about $5 million a year earlier. Dubow noted, however, that retransmission consent fees totaled $14 million and online revenues rose 9%. Asked to predict when TV ad pricing would improve, Gannett execs said they were waiting to see what happens to the Big Three US automakers.
Publishing ad revenues decreased 34.1% to $722.8 million, while circulation revenues were down 3.1% to $300 million. US ad revenues were down 28.2% for the nation’s largest newspaper group. Flagship USA Today saw its ad revenues fall 33.5%.
Editor’s note: Hopes for that to be the bottom faded in Q1. If you look at the index graphs below you’ll see a second trough in early March which dipped below November’s all-time lows for both indices. So much for beginning the rebuilding process.Review RBR/TVBR’s exclusive analysis on – “Is it the bottom yet for broadcasting stocks?”