Gannett's profit plummets 53 percent

In another blow for industry, New York Times plans to cut 100 newsroom jobs

Gannett, the nation's largest newspaper chain and publisher of USA Today, said Monday that its third-quarter profit plunged 53 percent from a year earlier, but the results still beat analysts' forecasts, a sign of how low expectations are for the battered newspaper industry.

The McLean company reported a profit of $73.8 million (31 cents a share) on $1.3 billion in third-quarter revenue this year, compared with a profit of $158.1 million (69 cents) on $1.6 billion in revenue in the third quarter of 2008.

Gannett publishes 84 newspapers in the United States and 200 in Britain. The company also owns 23 television stations and CareerBuilder.com.

Most newspapers have experienced a decline in the past several years as readers and advertisers turn to other media. The industry's already perilous position was worsened by the recession, which began in December 2007 and forced businesses to dramatically cut back advertising. Also, the national unemployment rate of 9.8 percent translates to a sharp downturn in employment advertising in newspaper classifieds.

The Washington Post, for instance, lost $143 million through the first half of this year; The Post Co. reports third-quarter earnings later this month. The New York Times Co., which reports later this week, said Monday that it plans to cut 100 newsroom jobs by the end of the year.

Earlier this week, newspaper publisher McClatchy, which owns the Miami Herald and 80 other daily and non-daily newspapers, said its adjusted third-quarter profit -- removing special items -- was essentially flat compared with the third quarter of last year, thanks to cost-cutting. Year-over-year quarterly revenue at McClatchy was down 23 percent.

Gannett's ad revenue for the most recent quarter was down 28 percent. Overall revenue was down 18 percent. U.S. classified revenue was down 34 percent.

Excluding special changes, Gannett said it earned 44 cents per share. Last month, it projected earnings per share on that basis between 39 and 42 cents.

The company's shares gained $1.06, or 8.2 percent, to close at $14.06.

Gannett ordered a company-wide one-week furlough for most employees in the first quarter of this year to save costs. Gannett cut 1,000 newspaper-division jobs last year and more than 1,000 more this year.

Gannett chief executive Craig Dubow said the third quarter ended on an uptick.

"We finished the quarter on a stronger note with better than anticipated results due primarily to better trends in advertising and greater efficiencies across all our business segments," Dubow said in a statement, referring to cost-cutting. "Third quarter year-over-year comparisons of publishing advertising revenue were a few percentage points better than year-over-year comparisons for the second quarter and September was our best comparison month of the year."