Gannett Third-Quarter Profit Down 32 Percent

From the Associated Press

Gannett said its third-quarter profit fell 32 percent, to $158 million (69 cents a share) from $234 million ($1.01), as it saw less advertising revenue than last year as part of broader cutbacks in a worsening economy. Revenue at the nation's largest newspaper publisher fell 9 percent, to $1.64 billion.

Advertising revenue at the McLean company's publishing business fell 17.7 percent. Classified revenue for real estate tumbled 41.5 percent, while the company saw a 34 percent reduction in sales for help wanted ads. Ad revenue at USA Today fell 7.1 percent.

Circulation was down 3.3 percent, contributing to an overall 14.4 percent revenue drop in the publishing business. Gannett could see gains in circulation revenue later this year as newsstand prices for USA Today, the nation's top-selling paper, rises 25 cents to $1 on Dec. 8.

Demand for political advertising helped offset some of the losses at Gannett, particularly in its broadcast division, which saw a 3.9 percent increase in revenue. Gannett's NBC television stations also got a boost from ads during the Olympics.

Gannett announced cuts of some 1,100 jobs across its local newspapers in August and September as it looks for cost savings to offset the revenue decline. The company took an after-tax charge of $14.4 million in the quarter for expected severance payments.

The company also said it reduced newsprint costs by 3.4 percent by using less in light of a 15.9 percent increase in prices.

For the first nine months of 2008, Gannett lost $1.9 billion, or $8.49 a share, largely on an accounting writedown for the declining value of its newspapers. In the year-ago period, it earned $810 million, or $3.46 a share. Revenue dropped 9.2 percent to $5.03 billion.

By Terri Rupar  |  October 24, 2008; 10:25 AM ET  | Category:  Earnings , Economy Watch
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