Gannett Newspaper Ad Revenue Up Slightly in Q3

By: E&P Staff Gannett announced today that total newspaper segment operating revenues were $1.70 billion for the quarter, a 7.1% increase year-over-year.

Newspaper results in the quarter and year-to-date include the Tallahassee (Fla.) Democrat, 100% of the Detroit Newspaper Partnership, PointRoll, Hometown Communications, and NurseWeek.

Assuming Gannett had owned the same group of properties in both the third quarter of 2005 and 2004, advertising revenues would have risen 1.1%. On the same basis, classified advertising advanced 1.4%; local advertising revenues rose 1.3% while national revenues were flat. Total newspaper segment operating cash flow, which includes USA Today and the company's UK properties, was up 3.2% to $484.3 million, versus $469.3 million in the same quarter of 2004.

"In the third quarter of last year, the company benefited from over $50 million of Summer Olympics and politically-related advertising," Craig Dubow, president and CEO, said in a statement. "The absence of these events combined with softer ad demand in the auto category unfavorably impacted our broadcasting segment results. Our domestic newspapers posted solid revenue gains driven by classified advertising demand, particularly employment and real estate."

Total newspaper segment operating expenses increased 9% in the quarter due principally to the full consolidation of Detroit operations. Newsprint costs rose 7.7% substantially due to the inclusion of 100% of the Detroit operations. Assuming Gannett had owned the same group of newspaper properties for all of the third quarter of 2005 and 2004, newspaper operating expenses would have risen 1.7%.

At USA Today, advertising revenues declined 2.7% in the third quarter reflecting the absence of Summer Olympics-related ad demand. Paid advertising pages totaled 981 compared with 1,082 in 2004's third quarter, a 9.3% decline. For the year-to-date, USA Today's advertising revenues were slightly ahead of last year and paid pages totaled 3,273 compared with 3,448 for the same period in 2004.

Third quarter earnings from operations per diluted share were $1.14 including income from discontinued operations of 1 cent per diluted share. Diluted earnings per share from continuing operations, on a GAAP (generally accepted accounting principles) basis were $1.13 for the third quarter compared to $1.16 in the third quarter of 2004.