Gannett Reports 9 Percent Drop in Earnings for 1Q

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The nation’s largest newspaper publisher Gannett Co. says its earnings fell about 9 percent in the first three months of the year as the weak economy contributed to a drop in advertising.

The McLean-based publisher of USA Today and 85 other daily newspapers in the U.S. on Monday reported a profit of $191.8 million, or 84 cents a share, compared with $210.6 million, or 90 cents a share, in the first three months of 2007.

Excluding a gain of 7 cents per share for the sale of land, the results were in line with estimate of 77 cents per share of Wall Street analysts surveyed by Thomson Financial.

Quarterly revenue fell 8 percent to $1.68 billion from $1.83 billion a year ago.

Here is the company’s release today, starting with March results.
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Publishing advertising revenues in March were 12.8 percent lower compared with the same period a year ago.

Retail advertising revenues declined 8.3 percent in March. In the U.S., across all products, the decline was led by softness in the furniture, financial, home improvement and telecommunications categories.

Classified revenues were 18.0 percent lower in the third period in part reflecting the Easter switch. Real estate revenues declined 26.3 percent, employment revenues were 24.2 percent lower and automotive revenues were down 12.8 percent. Classified results at Newsquest in the UK were stronger than in U.S. community publishing. For U.S. community publishing, classified revenues were 22.8 percent lower in March reflecting declines of 35.2 percent in real estate revenues, 30.0 percent in employment revenues and 10.3 percent in automotive revenues. Classified revenues at our operations in the UK were 11.7 percent lower, in pounds, comprised of declines of 14.4 percent in real estate, 15.1 percent in employment and 20.8 percent in automotive.

National advertising revenues for the third period declined 10.5 percent. At USA TODAY, advertising revenues were down 14.0 percent on paid ad pages of 236 versus 303 last year. In the third period at USA TODAY, growth in the entertainment, financial and advocacy categories was offset by weakness in the automotive, telecommunications, retail and technology categories.

Broadcasting revenues, which include Captivate, were 8.0 percent lower. Television revenues were 8.3 percent lower in the period as local and national revenues declined 11.2 percent and
6.7 percent, respectively.

First Quarter

For the first quarter of 2008, total operating revenues were 8.4 percent lower.

Publishing advertising revenues for the quarter declined 10.2 percent. For the quarter, retail advertising revenues were down 7.8 percent. Classified revenues declined 16.0 percent for the quarter. Real estate revenues declined 24.2 percent, employment revenues were 20.0 percent lower and automotive revenues were down 13.6 percent. Classified revenues were down 20.1 percent for U.S. community publishing comprised of declines of 30.6 percent in real estate, 26.1 percent in employment and 11.4 percent in automotive revenues. Classified revenues in the UK, in pounds, were 9.1 percent lower in the quarter. Real estate revenues declined 13.6 percent, employment revenues were down 8.2 percent and automotive revenues were 21.1 percent lower.

National advertising revenues were unchanged for the quarter. At USA TODAY, advertising revenues were up 2.1 percent. Paid advertising pages totaled 826 compared with 904 in the year-ago period.

Broadcasting revenues declined 7.0 percent and television revenues were 7.3 percent lower. The absence of advertising demand related to the Super Bowl that benefited our CBS affiliates in the first quarter of 2007 and a softer economic environment offset a $4.2 million increase in political advertising in the quarter. Based on current pacings, television revenues for the second quarter of 2008 would lag last year?s second quarter in the mid to high single digits.

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