Gannett typically kicks off the earnings season for media companies. And while the story it tells this morning for Q2 is far from cheery — revenues and profits are down for the No. 1 newspaper publisher — it’s also not as bad as Wall Street feared. The company reported net income of $135.6M, down 18.1% vs the period last year, on revenues of $1.31B, -2.1%. The revenue figure is slightly short of the $1.32B analysts projected. But earnings per share, excluding special items for this year and last year, came in at 56 cents, ahead of the consensus forecast of 52 cents. Gannett’s broadcasting unit, which includes 23 TV stations, provided most of the good news. Its revenues were up 11.4% to $205.4M — including a $9M boost from political ads. But even if you factor out political spots, ad sales would have been up 6.2% with strong demand from auto makers, the company says. Gannett forecasts that ad sales in Q3 will be up “in the low-thirties… benefiting from the Summer Olympic Games and political advertising.” The segment also reported $22.7M in retransmission consent revenues (+17.1%).
It’s hard to find much encouragement in the publishing sector which includes USA Today. Publishing revenues fell 5.8% to $920.3M. At the U.S. based operations, retail ads slid 7.0%, national ads were down 18.2% and classified dropped 3.7%. Many employees had to take a one-week furlough in Q2. But Gannett expenses included $9.7M in what it calls “workplace restructuring charges” after it offered workers incentives to retire early. Like nearly every newspaper company, Gannett is feverishly working to boost revenues from digital media. CEO Gracia Martore says that investments in digital marketing services and a digital relaunch “are all gaining traction.”
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