Gannett 3Q Earnings Slip

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By: E&P Staff

Gannett Co. Inc. reported Wednesday that it earned $261.4 million, or $1.11 per share, in the third quarter of 2006, down 9% from to $297 million or $1.22 per share in the same period last year.

Earnings per share (EPS) from continuing operations were $1.11 compared with $1.13 per share in the year-ago period. Gannett said its 3Q 2006 EPS would have been above last year’s result if stock compensation expenses of $10.3 million, which shaved 3-cents off the EPS after taxes, were excluded from this year’s quarterly results.

Total operating revenues were $1.91 billion in the third quarter, a 2.7% from the year-ago period. Gannett said the increase reflected higher demand for broadcast political ads, the acquisition of two television stations, and the full consolidation of its Detroit newspaper operations.

Consolidation at Detroit, where Gannett publishes the Detroit Free Press and owns a super-majority stake in the joint operating agreement with MediaNews Group’s Detroit News, helped push reported operating expenses up 4.9% in the quarter. Expenses were also pushed by newsprint expense, stock compensation expense and the acquisitions of the TV stations, Gannett said.

“Our performance this quarter was led by top-of-the-industry television results, fueled by strong political advertising demand, Gannett Chairman, President and CEO Craig Dubow said in a statement. “Our online and non-daily efforts again contributed positively. All of this was achieved despite the challenging advertising environment, uncertain economic outlook, higher interest and newsprint costs, and stock compensation expense.” said Craig Dubow, chairman, president and CEO of Gannett.

Newspaper operating revenues totaled $1.7 billion in the quarter, up 1.2% from a year ago.

Advertising revenues were up slightly for the quarter, and declined 1.2% on a same-property basis.

At its flagship USA Today, ad revenues were up 1.0% in the third quarter, with 912 paid advertising pages, compared with 981 in the year-ago period.

On a comparable basis, local advertising revenues were almost 1%, percent higher, national ad revenues decreased 3.4%, and classified revenues were down 2.3%

Total newspaper segment operating cash flow, including its United Kingdom papers and USA Today, was $451.5 million in the quarter, Gannett said.

Total newspaper operating expenses increased 4.2%, reflecting primarily the full consolidation of the Detroit newspaper operations and higher newsprint expense.

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