Gannett Co., the publisher of USA Today and more than 80 other daily newspapers around the country, is scheduled to report its third-quarter earnings before the stock market opens Friday.
WHAT TO WATCH FOR: For the biggest newspaper owner in the U.S., revenue from television advertising could make the difference in third-quarter results.
The McLean, Va., company owns 23 local TV stations, some of them in markets with fierce political contests heading into the November midterm elections. All of the cash spent on commercial time by campaigns and activist groups could help Gannett make up for declines in ad revenue at its newspapers. A recovering auto industry has also started pouring money into television ads.
Still, broadcast revenue accounts for only about 11 percent of Gannett's total. The bulk still comes from a diminished stable of newspapers. While declines in print advertising have slowed, there have been few signs of a rebound because businesses continue to put more money into cheaper Web advertising.
The reality of falling print revenue has prompted a major overhaul at Gannett's USA Today as the newspaper's print circulation drops. Investors will be looking to see if Gannett offers any new details about a reorganization aimed at putting a greater emphasis on producing news for the Web and mobile gadgets like Apple Inc.'s iPad. At the same time, the newspaper is under pressure to cut costs, saying this month that it will jettison 130 of 1,500 positions.
WHY IT MATTERS: Gannett will act as a bellwether for other newspaper owners, kicking of a slew of earnings reports from publishers including The New York Times Co., McClatchy Co. and Lee Enterprises Inc.
If publishers can't find a way to get revenue growing again, they will have to continue cutting into their newsrooms.
WHAT'S EXPECTED: Analysts polled by Thomson Reuters predict that Gannett's cost cutting will help deliver a more profitable quarter than the same three months of 2009. They forecast earnings of 50 cents per share, excluding unusual items, up from 44 cents a year ago.
They expect revenue to remain basically steady at around $1.33 billion.
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