New York Times Q4 Profit Declines, Revenues Beat View; Gannett Profit Surges

(RTTNews) - New York Times Co. (NYT) and Gannett Co. (GCI) on Tuesday reported strong revenue growth at their digital business segments, offsetting weakness in print operations. However, New York Times' profit for the fourth quarter that declined 47 percent from last year, while Gannett reported a 49 percent surge in profit for the quarter.

New York Times' profit for the quarter declined from last year, as severance expense associated with workforce reductions and retirement costs offset a slight increase in overall revenues. However, revenues beat analysts' estimates, reflecting growth in digital advertising and circulation that offset weakness at the print business.

Gannett Co Inc. (GCI), the parent company of USA Today, reported a surge in profit for the quarter, reflecting strong revenue growth in its broadcasting and digital segments. Adjusted earnings per share for the quarter beat analysts' expectations, while revenues missed their estimates. The company said it will resume its share buyback.

New York-based New York Times reported fourth-quarter net income attributable to common stockholders of $34.88 million or $0.22 per share, down from $65.63 million or $0.41 per share in the prior-year quarter.

The latest quarter's results include special items consisting of an impairment charge of $0.04 per share related to the company's investment in a joint venture and an income tax benefit of $0.07 per share, primarily due to a reduction in the company's reserve for uncertain tax positions.

Excluding items, adjusted income from continuing operations for the quarter was $0.26 per share, compared to $0.29 per share in the same period last year. On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.24 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total revenues for the quarter edged up 0.2 percent to $444.68 million from $443.86 million in the same quarter last year, and beat analysts' consensus estimate of $438.02 million.

Circulation revenues for the quarter grew 1 percent from the prior-year quarter to $210.56 million, and other revenue increased 10 percent to $26.50 million.

Meanwhile, advertising revenues declined 2 percent to $207.63 million, with print advertising revenues decreasing 9 percent and digital advertising revenue increasing 19 percent.

Paid digital subscriptions in the quarter rose 20 percent from last year to about 910,000. Revenues from the company's digital-only subscription packages, e-readers and replica editions increased 14 percent to $44.5 million.

Total operating costs grew 3 percent to $382.26 million, mainly due to severance expense associated with workforce reductions as well as retirement costs.

New York Times said it finished the year with 910,000 paid digital subscribers, an increase of 150,000 from the previous year. This beat its tally of net new additions in 2013 by 25 percent and puts it on track to exceed the one million digital subscriber milestone in 2015.

Looking ahead to the first quarter, New York Times expects total circulation revenues to increase at a rate similar to the fourth quarter of 2014, while total advertising revenues are projected to decline in the mid-single digits from the year-ago period. Street expects 1.9 percent decline in total revenues for the quarter to $382.90 million.

Meanwhile, McLean, Virginia-based Gannett's fourth-quarter net income was $676.03 million or $2.92 per share, up from $90.75 million or $0.39 per share in the year-ago period.

The latest quarter's results include special items that resulted in a gain of $1.90 per share, while the prior-year period's results included special items of $0.27 per share, reflecting charges.

Excluding special items, adjusted earnings for the quarter were $1.02 per share, compared to $0.66 per share in the prior-year period. On average, nine analysts polled by Thomson Reuters expected earnings of $1.00 per share for the quarter. Analysts' estimates typically exclude one-time items.

The latest quarter's results reflect Gannett's expanded television station portfolio in the broadcasting segment as well as strong performance by the Cars.com acquisition in the Digital Segment.

In October 2014, the company completed the acquisition of the 73 percent stake that it did not already own in Classified Ventures LLC, which owns Cars.com. Results for the latest quarter include the impact of the acquisition.

The newspaper and broadcast company's revenues grew 24 percent to $1.70 billion from $1.37 billion in the same period last year. Analysts were looking for revenue of $1.74 billion for the quarter.

On a pro forma basis, total company revenues rose 4 percent in the quarter, due primarily to substantial revenue growth at the expanded television station portfolio and strong growth at Cars.com.

Broadcasting revenues surged 117 percent from the year-ago period to $495.3 million, reflecting higher political spending and retransmission revenue as well as the acquisition of Belo Corp.

Meanwhile, publishing revenues declined 6 percent to $885.5 million, as advertising revenues decreased 8 percent and circulation revenues declined 2 percent.

Digital segment revenues rose 77 percent to $345.4 million, primarily reflecting the impact of the Classified Ventures acquisition and strong results at Cars.com.

Gannett said it is resuming its share buyback program that was authorized in June 2013, but suspended in August 2014. The company has about $150 million remaining under the current authorization.

In August 2014, 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.

The company said Tuesday that it is on track with the separation and will share more details of its plans for the Publishing and Broadcasting/Digital companies in the coming months.

NYT is trading at $13.55, up $0.79 or 6.19 percent on a volume of 96.094 shares. GCI is trading at $32.68, up $1.17 or 3.71 percent on a volume of 234,215 shares.