The owner of USA Today is starting the year with a familiar story: yet another drop in newspaper advertising revenue.
Gannett Co.'s first-quarter earnings forecast dampened hopes for a long-awaited rebound at the largest U.S. newspaper publisher. Besides USA Today, Gannett owns more than 80 daily newspapers.
Newspaper advertising has fallen in each of the past four years, prompting Gannett to lay off workers and impose unpaid leaves to reduce expenses.
In a presentation Thursday at an analyst conference in New York, Gannett projected first-quarter revenue in its publishing division will drop by 6 percent to 7 percent from the same time last year. That forecast excludes the contributions of a Hawaii newspaper that Gannett sold later in the year.
Like other major newspaper publishers, Gannett relies on advertising for most of its revenue. But advertisers have been shifting their spending from print to free and cheaper alternatives on the Internet.
The anticipated decline in the first quarter is slightly more severe than a 5 percent revenue decrease that Gannett's publishing division recorded in fourth quarter of 2010 compared with a year earlier.
Despite the latest falloff, Gannett still expects to hit a key financial target for the January-March period. The company foresees earnings of 41 cents per share, matching the average estimate among analysts polled by Thomson Reuters. But the forecast falls 2 cents below the benchmark among analysts tracked by FactSet. The projected performance represents a 16 percent decrease from 49 cents per share at the same time last year.
In the current quarter, revenue from Gannett's 23 TV stations is expected to fall by about 2 percent from the same time last year. The broadcast division got a boost last year because some of Gannett's stations are affiliates of the networks that showed the Super Bowl and Winter Olympics in 2010. Those events were not part of the Gannett's programming this year.
Gannett shares fell 45 cents Thursday to close at $14.93.