Gannett Co. of Arlington yesterday reported that stronger-than-expected growth in newspaper revenue helped produce a 10 percent increase in second-quarter profit, which grew to $244.2 million (87 cents a share) from $222.8 million (78 cents).
Television revenue and operating profit for the quarter were down about 4 percent from the previous year, the company said. But revenue at the company's 74 daily newspapers was up about 4 percent, producing a 12 percent improvement in profit for that division.
The Gannett papers benefited from strong demand for classified and national advertising that contributed to a 20 percent gain in second-quarter ad revenue at USA Today, the company's flagship paper.
Operating revenue for the quarter grew 3 percent, to $1.34 billion, from $1.30 billion and for the first half increased slightly faster, to $2.59 billion from $2.50 billion. First-half profit grew 11 percent, to $423.1 million ($1.50), from $382.1 million ($1.33) in the same period a year ago.
Gannett frequently makes big one-time profit buying and selling media properties and does not include them in reported operating income, which is the measure used by analysts to gauge the company's performance.
In the second quarter, Gannett said it had an additional after-tax gain of $32.8 million on a television station swap, which boosted total net income to $277 million (98 cents).
Excluding that TV station swap profit, Gannett's quarterly operating earnings of 87 cents a share were a penny a share greater than the consensus forecast of analysts. The company could have another big one-time gain coming up, analysts said: It is negotiating with several buyers for the more than 500,000-subscriber cable system it acquired from Multimedia Corp. in 1995. The cable systems, in Kansas, Oklahoma and North Carolina could bring as much as $2.5 billion, industry sources estimated.
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