Q4 held up for Gannett TV


Gannett CEO Craig Dubow reported that the company’s TV group exceeded expectations in Q4, with political advertising helping to boost ad revenues nearly 2%. That is not continuing, and Q1 is expected to be down in the mid teens. Needless to say, Gannett’s newspapers are having an even rougher time. What’s next? Maybe a dividend cut.

Including the Captivate in-elevator video service, broadcast division revenues were up 0.4% in Q4 to $212.8 million. “Political revenues helped to boost results at our broadcasting segment. We exceeded our projections for the fourth quarter of 2008, with political spending totaling about $58 million. As anticipated, our stations in Denver, Minneapolis, Cleveland, St. Louis, Washington, DC, Atlanta and Phoenix saw significant political advertising. Broadcasting revenue was up slightly for the quarter. Television revenue, which excludes Captivate, was up almost 2% for the quarter. Online revenue in broadcasting was up about 7%,” said Dubow in reviewing segment results.

But newspaper publishing is the biggest part of Gannett and the nation’s largest newspaper company is suffering along with the rest of that industry. Publishing operating revenues fell 18.6% in Q4 to $1.4 billion, with advertising revenue dropping 22.7% overall and 17.7% in the US.

Gannett reported that Q4 earnings per share were 69 cents, down from $1.06 a year ago. But that’s only a preliminary number. Gannett, like so many other media companies, is taking an impairment charge for the declining value of goodwill and other intangible assets. That Q4 charge, yet to be nailed down, is expected to be in the range of $5.1-5.9 billion.

For a company that has been focused on cutting costs in the face of declining revenues, Gannett is paying out a hefty dividend. The current dividend of 40 cents per share quarterly works out to a yield well above 20% at the company’s beaten down stock price. The board of directors meets next month to make its quarterly dividend decision and Gannett officials are not ruling out a reduction in the payout.

As for TV pacings, Dubow said Gannett’s stations will get some boost from the Super Bowl, but are pacing down in the mid teens for Q1, with auto and retail hit “fairly hard.” Some analysts followed up on that projection, since some other TV groups have had significantly worse Q1 pacings, but Dubow repeated that Gannett’s TV pacings are down in the mid teens.