Matt,
I don't have PM capability so I wanted you to see this--found link at drudgereport.com
Players like Gannett should buy hypster
Gannett Profit Falls 36% as USA Today Ad Sales Plunge (Update1)
By Sarah Rabil
July 16 (Bloomberg) -- Gannett Co., the largest U.S. newspaper publisher, said second-quarter profit declined 36 percent after advertising sales at USA Today plunged. The stock dropped to its lowest level since 1985.
USA Today's ad sales fell 27 percent in June, the steepest monthly decline this year and worse than the 16 percent drop reported for all Gannett publications. During the quarter, the company's national advertising slid 14 percent to $168.9 million because of cutbacks by retailers and carmakers.
``The weakening economy had a dramatic impact on our results,'' Chief Executive Craig Dubow said in the statement.
Earnings fell to $232.7 million, or $1.02 a share, from $365.7 million, or $1.56, a year earlier, McLean, Virginia-based Gannett said today in a statement. Sales dropped 10 percent to $1.72 billion, hurt by the print ad decline as well as lower revenue from the company's 23 television stations.
The results are preliminary and don't include a writedown of as much as $2.7 billion that reflects a drop in Gannett's stock price and an industrywide slump in ad sales.
Gannett fell $2.24, or 13 percent, to $15.11 at 9:54 a.m. in New York Stock Exchange composite trading after earlier falling as much as 16 percent. The stock had dropped 56 percent this year before today.
The earnings were in line with a forecast range of $1.01 to $1.03 a share that Gannett gave in June.
First to Report
Gannett is the first newspaper company to report second- quarter earnings. The company continues to face pressure from rising newsprint prices, falling ad sales and lower revenue from the jobs Web site CareerBuilder Inc., said analyst Craig Huber of Lehman Brothers Holdings Inc.
Huber rates the shares ``underweight'' and cut the stock price target yesterday for the sixth time this year, reducing it by 29 percent to $15.
The decline in June newspaper advertising sales topped the company's 14 percent drop in May. Classified sales in June shrunk 22 percent, also a record this year. The company is trimming expenses by freezing employees' pension benefits, shrinking page widths and switching to lighter paper.
The company is pursuing Internet growth through the acquisitions of ShopLocal LLC, owner of a marketing database for retailers, and a minority stake in Cozi Group Inc., operator of a social-networking site. This week Gannett joined the Platform A advertising network, run by Time Warner Inc.'s AOL.
Gannett said today that the second-quarter writedown, to be disclosed in a regulatory filing by Aug. 8, will reduce earnings per share and not change operating cash flow.
To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net
Last Updated: July 16, 2008 09:57 EDT
