Gannett Co. Q3 Earnings to Exceed Expectations Due to Layoffs, Falling Newsprint Prices

By: Gannett Co., the largest newspaper publisher in the U.S., said Tuesday it expects third-quarter earnings to far outpace expectations, as layoffs and falling newsprint costs help offset weak advertising sales.

Shares jumped $1.80, or 18 percent, to $11.78 in premarket trading.

The company anticipates earnings of 25 cents to 31 cents per share on sales of $1.31 billion to $1.32 billion.

Adjusting to exclude charges of $26 million to $32 million for severance expenses and other items, the company says it expects earnings per share between 39 cents and 42 cents.

On that basis, analysts project 28 cents per share on sales of $1.38 billion, according to a Thomson Reuters poll.

Gannett also said it has whittled its borrowings to $3.31 billion from $3.51 billion.

In a statement, Gannett Chief Financial Officer Gracia Martore said advertising declines have moderated, though she did not offer specific figures. Gannett's newspaper advertising revenue was down 32 percent from the year before in the second quarter.

"Our continued efforts to achieve efficiencies and further consolidations companywide along with significantly lower newsprint expense resulted in another substantial decline in our operating expenses," Martore said.

Separately Gannett announced it intends to offer $400 million in senior notes.

Gannett reports earnings Oct. 19.


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