("Gannett 3Q Profit Drops 53% But Beats Views," published at
8:54 a.m. EDT, incorrectly called publishing revenue as print
revenue. The story also was unclear that a 14% drop in operating
costs was companywide, not just for Gannett's publishing
operations. A corrected story follows.)
DOW JONES NEWSWIRES
Gannett Co.'s (GCI) third-quarter profit tumbled 53% amid an
advertising slump, but the newspaper publisher's results beat its
heightened expectations, helped by cost cuts.
Shares rose 2.2% premarket to $13.29. The stock through Friday
was up 63% this year after bottoming in March at $1.85 amid debt
and advertising concerns.
The publisher of USA Today late last month said it expected
third-quarter profit to far exceed Wall Street's forecasts at the
time, adding to hopes that the worst may be over for traditional
media outlets. Gannett has been cutting jobs and last month sold
$500 million of notes to pay off other debt. However, concerns
persist over Gannett's ability to sustain its rebound with cost
cuts.
Chairman and Chief Executive Craig Dubow, who last week returned
from a four-month medical leave, reiterated the more optimistic
view, citing "better trends in advertising." Publishing ad revenue
dropped 28% in the quarter. Operating expenses companywide fell
14%.
The owner of more than 80 daily newspapers said profit fell to
$73.8 million, or 31 cents a share, from $158.1 million, or 69
cents a share, a year earlier. Excluding asset write-downs and
restructuring costs, earnings fell to 44 cents from 76 cents.
Gannett's upbeat September forecast, excluding restructuring
charges, was 39 cents to 42 cents.
Revenue dropped 18% to $1.34 billion, better than Gannett's
forecast for a weaker-than-expected decline to about $1.32
billion.
Publishing revenue dropped 24% while broadcasting reported a 23%
decline.
Gannett said last month it cut its total debt in the latest
quarter by $200 million to $3.31 billion. It faces no debt
maturities for nearly two years, thanks to its debt-restructuring
efforts.
Gannett's challenges are reflected in USA Today's being
unofficially surpassed by The Wall Street Journal as the largest
U.S. newspaper by weekday circulation. In the last two weeks, the
Gannett flagship, which had the largest circulation for years, said
it had slipped to about 1.9 million, while the Journal, which, like
this newswire, is owned by News Corp. (NWS), said its circulation
rose to 2.02 million, including online subscriptions. Official
figures will be released Oct. 26.
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com
