By: Gannett Co., the largest newspaper publisher in the United States, reports fourth-quarter earnings on Friday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Gannett (nyse: GCI - news - people ), which publishes USA Today and 85 other daily newspapers, along with nearly 1,000 other publications, said operating revenue dropped 4.6 percent in November, hurt by continued sharp declines in newspaper classified and real estate advertising.
Newspaper publishers have struggled in recent years as advertisers follow readers to the Internet, depriving print publications of their primary source of revenue. In addition, a sluggish economy and the housing slump have slowed advertising for jobs and real estate.
That month, USA Today announced plans to eliminate approximately 45 newsroom positions. The cuts were expected to be scattered throughout news, money, sports and lifestyle sections.
In December, McClean, Va.-based Gannett said USA Today would offer a lifestyle magazine inside its pages four times a year starting in March. Open Air, a 68-page glossy targeting wealthy readers, will feature stories on topics including outdoor activities, nutrition and travel.
Gannett said in October it would partner with Tribune Co. (nyse: TRB - news - people ) in a joint venture to expand a national network of local entertainment Web sites. Originally launched by the Chicago Tribune as a youth-oriented listings site, metromix.com recently marked its 10th anniversary. The new company, Metromix LLC, will launch the site in 25 of the nation's top 30 markets and expand it to more than 40 markets by the end of 2008.
The two companies also said earlier in the month that they would team to publish and syndicate a weekly edition of USA Today outside the United States.
BY THE NUMBERS: Gannett predicts fourth-quarter net income in a range of $1.26 to $1.29 per share. Analysts surveyed by Thomson Financial, on average, expect a profit of $1.27 per share, with the low end of estimates at $1.26 per share and the high end at $1.29 per share. Consensus estimates put revenue at $1.98 billion.
ANALYST TAKE: John Janedis of Wachovia (nyse: WB - news - people ) Capital Markets LLC said in a client note that he expects continued newspaper fundamental softness to override any potential political advertising gains the sector may experience this election year - and Gannett is not immune.
The analyst reiterated a fourth-quarter profit estimate of $1.27 per share, but cut his 2008 forecast to $4.25 per share from $4.30 per share.
STOCK PERFORMANCE: Gannett's stock declined 11 percent during the quarter to end at $39, capping a 35 percent slide for 2007.
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