Gannett Q4 Profit Down 12%, But Beats View

(RTTNews) - Media holding company Gannett Co. Inc. (GCI), the publisher of USA Today, on Tuesday reported a 12 percent decline in profit for the fourth quarter from last year. The results reflect lower advertising revenues at the company's publishing and broadcasting segments. Adjusted earnings per share beat analysts' expectations, while revenues missed their estimates.

Segment-wise, Gannett's publishing segment revenues for the fourth quarter declined 10 percent from the year-ago period to $944.26 million, reflecting lower advertising demand and challenging circulation revenue comparisons that reflect the impact of the All Access Content Subscription Model.

Advertising revenue at the publishing segment decreased 10 percent from last year, due to secular pressures as well as the relatively slow pace of economic recovery. Circulation revenue declined 8 percent, as lower circulation revenue at local domestic publishing operations more than offset higher circulation revenue at Newsquest due to increase in cover prices.

Broadcasting segment revenues declined 21 percent from last year to $228.21 million. The decrease reflects the absence of $85.8 million of incremental politically related advertising during the year-ago period, partly offset by a substantial increase in retransmission revenue.

Meanwhile, digital segment revenue increased 4 percent to $195.57 million, due primarily to strong revenue growth at CareerBuilder. Company-wide digital revenues increased 6 percent.

Gannett, the McLean, Virginia-based publisher of 82 U.S. daily newspapers and owner of 40 television stations, said that fourth-quarter net income attributable to the company declined to $90.75 million or $0.39 per share, from $103.09 million or $0.44 per share in the same quarter last year.

Special items in the latest quarter totaled $0.27 per share, reflecting charges associated with facility consolidations, non-cash asset impairments, workforce restructuring and transaction-related fees. The year-ago period's results included special items totaling $0.45 per share.

Adjusted earnings for the latest quarter were $0.66 per share, compared to $0.89 per share in the year-ago period. On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.65 per share for the quarter. Analysts' estimates typically exclude special items.

Gannett noted that the adjusted earnings results reflect revenue growth in the digital and broadcasting segments, excluding the record level of political spending in the year-ago period and a solid performance in the publishing segment.

Total operating revenues for the quarter declined 10 percent to $1.37 billion from $1.52 billion in the prior year quarter. Analysts had a consensus revenue estimate of $1.94 billion for the quarter.

For fiscal 2013, net income attributable to Gannett decreased to $388.68 million or $1.66 per share from $424.28 million or $1.79 per share in the previous year. Adjusted earnings per share for the year were $2.02, compared to $2.33 per share in the prior year.

Operating revenues for the year declined 4 percent to $5.16 billion from $5.35 billion last year.

Street expected the company to earn $2.01 per share for the year on revenues of $5.24 billion.

Looking ahead to 2014, Gannett said it anticipates increased advertising demand in connection with the Winter Olympics and elections.

In Tuesday's regular session, GCI is trading at $27.27, up $0.76 or 2.87 percent on a volume of 784,037 shares.