One-Time Gains Lift Gannett's Profit
Thursday, July 19, 2007
Gannett, the nation's largest newspaper chain, has suffered from the industry-wide advertising downturn, the McLean company reported yesterday, though it is weathering the slump better than its rivals.
Overall, the company's profit for the second quarter rose 18 percent to $366 million ($1.56 a share) from $310 million ($1.31) a year ago, as it sold some of its newspapers and continued to cut costs.
But the picture excluding those one-time gains was dimmer. The company said income from continuing operations for the quarter fell 4.9 percent to $289.9 million. Total revenue dropped 3.5 percent, to $1.93 billion.
Advertising at the chain's 85 newspapers -- including USA Today, the nation's largest --was down 5.3 percent for the quarter, which ended July 1, compared with last year. Ad revenue at USA Today was down 1 percent.
Hardest hit was classified advertising at the company's community papers, which was down 7 percent for the quarter, the company said, reflecting the industry-wide trend of papers losing job recruitment and other classified ads to online sites such as Monster and Craigslist and companies that now recruit directly on their Web sites.
Print advertising was further hurt by the U.S. housing slump, the company said.
In Gannett's June advertising numbers, also released yesterday, newspaper ad revenue was down 6.2 percent for the month, compared to June 2006. The rest of the newspaper industry would see such a decline as good news.
Other large chains have yet to release their June numbers, but by comparison, Tribune Co.'s May ad revenue was down 12 percent compared to May 2006. At McClatchy, May ad revenue was down 10 percent.
At the company's 23 television stations (including Washington's WUSA Channel 9), second-quarter revenue was down less than 1 percent. Revenue would have been down nearly 7 percent, however, had the company not purchased two stations in the quarter.
The company's sole bright spots from continuing operations were increased revenue from the company's Captivate Network, which sells advertising on screens in elevators and other public spaces, and the company's operations in Britain, where it owns 18 daily newspapers and numerous other titles.
Gannett stock closed down $1.36 yesterday, or 2.5 percent, at $53.49.