Newspaper woes hang over Gannett's 3Q results

AP News
Posted: Oct 14, 2011 4:37 PM
Newspaper woes hang over Gannett's 3Q results

Gannett Co.'s new CEO took over just in time to discuss third-quarter earnings, which are expected to reflect depressing trends facing the largest U.S. newspaper publisher. The numbers are due out before the stock market opens Monday.

WHAT TO WATCH FOR: Gannett's results will be broken down by Gracia Martore, who was named the company's CEO earlier this month after Craig Dubow resigned for health reasons. The biggest concern for investors is whether its long-running slump in print advertising worsened during the July-September period. The owner of USA Today and more than 80 other dailies has already warned investors that advertising revenue in its newspaper division fell in the quarter, extending a decline that began in 2006.

It will be a bad sign if the decline is worse than the 7 percent year-over-year decline that the company's newspapers suffered in the April-June period.

Gannett's situation isn't unusual. As advertisers continue to spend more on the Internet, most major newspaper publishers have struggled. Newspapers have garnered some digital advertising, but those gains haven't come close to making up for losses on the print side.

Gannett has more of a cushion than some of its peers because it also owns 23 television stations.

To help offset the sharp drop in advertising, Gannett and other newspaper publishers have resorted to layoffs and furloughs.

WHY IT MATTERS: Gannett, which is based in McLean, Va., will be the first major U.S. newspaper owner to report its third-quarter results, giving investors a better sense how the industry is holding up as the economy sputters.

WHAT'S EXPECTED: Analysts polled by FactSet expect Gannett to earn 44 cents per share on revenue of $1.28 billion.

LAST YEAR'S QUARTER: Gannett earned $101 million, or 43 cents per share, on revenue of $1.31 billion.