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Gannett posts 33% increase in Q3 profits, shares rise

Gannett posts 33% increase in Q3 profits, shares rise


Gannett Co. (NYSE:GCI) Monday posted 33 per cent rise in third quarter profits, on strong results from its broadcasting segment, circulation revenue growth and "enhanced" digital segment performance.

Shares of the company rose 2.07 per cent on the news, trading at $18.27 as at about 9:30 a.m. EDT.

For the third quarter ended September 23, net income attributable to the company, whose portfolio of national brands includes USA Today, was $133.1 million, or 56 cents per diluted share, versus $99.8 million, or 41 cents per diluted share, in the year earlier period.

In addition to the $10 million of investments in strategic initiatives, results for the second quarter included $14.7 million of special charges affecting operating income, including depreciation costs, workforce restructuring charges and pension settlement costs.

Excluding special items, profit was 56 cents per share, up from 44 cents in the same quarter last year. 

Operating revenues for the company in the third quarter were 3.4 per cent higher than the prior year and totalled $1.31 billion.

Analysts were anticipating earnings per share of 53 cents for the latest quarter on revenue of $1.29 billion.

“We are extremely pleased to report strong results and a return to revenue growth,” said Gannett's president and CEO Garcia Martore.

“We achieved record third quarter results in our Broadcasting segment.”

Martore said that the company’s TV stations leveraged top 10 ratings positions and a more locally focused sales effort to generate “substantially higher” Olympic spending, and also “maximized” the opportunity to attract political spending. 

“The early success of our new, all access content subscription model resulted in significant growth in company-wide circulation revenue, the first increase since early 2007,” noted Martore.

“Our digital strategies are working and company-wide digital revenue now represents more than 25 percent of total revenues.”

Martore went on to say that Gannett’s “all-access” content subscription model has been rolled out in 71 markets and is delivering circulation revenue gains.

In September, the company re-launched its flagship USA TODAY brand, which it “re-imagined and redesigned”. 

Gannet said that it is seeing early successes in positioning the company for growth in the digital era.

Broadcasting revenues were up 38.1 per cent to $233.0 million, compared to $168.8 million in the third quarter a year ago, reflecting $41.7 million in politically related advertising and about $37 million in ad spending related to the Summer Olympics, the company said.

Digital segment revenues were 4.7 per cent higher due primarily to revenue growth at CareerBuilder, Gannett said, and higher revenue associated with digital advertising and marketing solutions across all segments.

The company said its publishing unit sales were were $890.2 million, down three per cent compared to $917.8 million in the third quarter in 2011, as the “slow pace” of the economic recovery resulted in soft advertising demand.  

Advertising revenues totaled $552.7 million, a 6.6 per cent decline compared to the third quarter last year. In the U.S., advertising revenues were six per cent lower in the quarter while at Newsquest, the company's operations in the UK, they were down 7.4 per cent, in pounds.

Operating expenses including special charges were $1.09 billion in the quarter, up 2.3 per cent from a year earlier.

Gannett is an international media company that engages more than 100 million people every month through its network of broadcast, digital, mobile and publishing properties.


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