Gannett Q3 Profit Up 49%, Beats View

(RTTNews) - Gannett Co. Inc. (GCI), the parent company of USA Today, Tuesday reported a 49 percent increase in profit for the third quarter from last year, reflecting higher revenues in the company's broadcasting and digital segments. Earnings per share for the quarter beat analysts' expectations, while revenues matched their estimates.

Gracia Martore, president and chief executive officer of Gannett, said, "Double digit pro forma growth in Broadcasting revenue, which again reached a record high, was driven by robust political ad spending and retransmission revenue. Strong results at CareerBuilder resulted in a substantial increase in profitability in our Digital Segment. We also successfully completed our acquisition of Cars.com earlier this month, which paves the way for our announced separation."

McLean, Virginia-based Gannett's net income for the third quarter was $118.52 million or $0.51 per share, up from $79.75 million or $0.34 per share in the year-ago period.

The latest quarter's results include special items totaling $0.08 per share, while the prior-year period's results included special items of $0.09 per share.

Excluding special items, adjusted earnings for the quarter were $0.59 per share, compared to $0.43 per share in the prior-year period. On average, eight analysts polled by Thomson Reuters expected earnings of $0.55 per share for the quarter. Analysts' estimates typically exclude one-time items.

The latest quarter's results reflect the company's expanded television station portfolio in the broadcasting segment as well as significantly improved results for the digital segment.

The newspaper and broadcast company's revenues grew 15 percent to $1.44 billion from $1.25 billion in the same period last year. Analysts were looking for revenue of $1.44 billion for the quarter.

The increase reflects revenue growth in the Broadcasting Segment, due primarily to the acquisition of Belo Corp., and Digital Segment revenue growth. However, publishing Segment revenues were lower in the quarter. On a pro forma basis, total company revenues were up 3.8 percent in the quarter.

Broadcasting revenues surged 105 percent from the year-ago period to $416.51 million, reflecting the impact of the Belo acquisition as well as substantially higher political advertising and re-transmission revenues.

Publishing revenues declined 4 percent to $826.8 million, as advertising revenues decreased 5 percent and circulation revenues rose 1 percent.

Digital segment revenues rose 4 percent to $199.80 million, due mainly to 7 percent growth in revenues from job search site CareerBuilder.com.

In early August, Gannett said it plans to create two publicly traded companies with scale - one exclusively focused on its Broadcasting and Digital businesses, and the other on its Publishing business.

Gannett also said at that time that it signed a definitive agreement to acquire full ownership of Cars.com, a digital company in the automotive space. Under the agreement, Gannett will acquire the 73 percent stake that it does not already own in Classified Ventures LLC, which owns Cars.com, for $1.8 billion in cash.

GCI closed Friday's trading at $27.69, up $0.36 on a volume of 2.49 million shares.