By: The Associated Press and E&P Staff Gannett Co., the largest newspaper publisher in the country and owner of USA Today, said Wednesday that September operating revenue fell 4 percent, as advertising revenue slipped in all categories.
The company said local, national and classified ad revenue each fell, leading to a 4.8 percent drop in total ad revenue to $418.8 million in the month.
Broadcast revenue also dropped 8.9 percent to $64.8 million, as the year-ago period benefited from political advertising around the national elections.
Earlier Wednesday, Gannett reported a 11 percent drop in third-quarter earnings on 4 percent lower revenue.
At USA Today, advertising revenues decreased 6.6 percent compared with the third quarter of 2006. Paid advertising pages totaled 803 compared with 929 in the same period a year ago.
The first part of Gannett's release follows.
*
Gannett Co., Inc. reported today that 2007 third quarter earnings per diluted share from continuing operations were $1.01 compared with $1.08 per share in the third quarter of 2006. In the quarter, the company took $14.5 million in severance expenses and facility consolidation costs related to a number of efficiency efforts in the UK and U.S.
Commenting on the third quarter results, Craig A. Dubow, Chairman, President and Chief Executive Officer, said: ?Results for the quarter reflected an improved picture in the UK, digital growth, and our strong fiscal discipline. However, the company was also unfavorably impacted by the difficult advertising environment and the relative absence of political advertising.
?On the upside, operations in the UK showed steady improvement in the quarter. Online initiatives companywide also contributed positively to results. Broadcasting revenue, excluding the effect of significantly lower political advertising, grew in the quarter due in part to Captivate as well as to online growth. But our domestic publishing properties were hindered by the slowdown in real estate ? particularly in Florida and the West where we have a considerable presence.
?We kept our usual tight rein on operating expenses throughout the quarter. During the quarter we had a significant level of severance expenses and consolidation costs related to efficiency efforts that will position us well for the remainder of the year and into 2008. Lower interest expense had a positive impact as well, as did the exchange rate.?
As previously reported the company completed the divestiture of five of its newspaper properties in May of 2007. Operating results for the third quarter and year-to-date exclude results from these properties which have been reclassified to income from discontinued operations.
Reported results for the current quarter and year-to-date include KTVD-TV in Denver and WATL-TV in Atlanta which the company acquired in the third quarter of 2006.
CONTINUING OPERATIONS
Total operating revenues for the company were $1.81 billion in the third quarter compared to $1.88 billion in the third quarter of 2006. The results reflect softer advertising demand at our domestic
community newspapers mitigated in part by stronger results at Newsquest in the UK. The broadcasting segment benefited from solid non-political ad growth and revenue growth at Captivate and online; however, revenue was down overall due to significantly less political advertising compared to the third quarter of 2006. On a pro forma basis, assuming Gannett owned the same complement of properties in the third quarters of 2007 and 2006, total operating revenues would have been 4.0 percent lower.
Operating cash flow (defined as operating income plus depreciation and amortization) was $473.1 million. Net income was $234.0 million in the third quarter compared to $256.2 million for the same period in 2006.
Reported operating expenses totaled $1.41 billion for the quarter, down 1.9 percent from the third quarter a year ago. The decline reflects continued cost control efforts and lower newsprint expense offset partially by the television station acquisitions, severance and accelerated depreciation expenses related to a number of efficiency efforts in the U.S. and the UK, and the higher exchange rate for the British pound. On a pro forma basis, total operating expenses were 2.1 percent lower. Corporate expenses totaled $17.8 million in the quarter, a decline of 8.2 percent from the $19.4 million reported in the third quarter of 2006.
Average diluted shares outstanding in the third quarter totaled 232,698,000 compared with 236,234,000 in 2006?s third quarter. Approximately 1.1 million shares were repurchased during the quarter and 2.8 million shares year-to-date.
NEWSPAPERS
Newspaper segment operating revenues totaled $1.62 billion for the third quarter compared to $1.69 billion in the third quarter a year ago. Advertising revenues totaled $1.19 billion for the quarter, a 5.6 percent decline. Local advertising revenues were down 3.9 percent, national advertising revenues were 4.1 percent lower and classified revenues declined 7.7 percent. Results for our UK operations, Newsquest, were stronger than our U.S. operations. Advertising revenues at Newsquest were down less than one percent on a constant currency basis. In the U.S., pro forma advertising revenues were 8.4 percent lower. Operating cash flow in the third quarter for the total newspaper segment, which includes USA TODAY and our UK properties, was $407.1 million.
Total newspaper operating expenses were $1.27 billion for the quarter, a decline of $27.7 million or 2.1 percent reflecting ongoing efficiency efforts and lower newsprint expense mitigated by approximately $14.5 million in severance expenses and facility consolidation costs related to a number of efficiency efforts in the UK and U.S. Reported newsprint expense was 13.4 percent lower in the quarter compared to the third quarter a year ago driven by usage prices that were almost 4 percent lower and a decline in usage of over 10 percent.
At USA TODAY, advertising revenues decreased 6.6 percent compared with the third quarter of 2006. Paid advertising pages totaled 803 compared with 929 in the same period a year ago.
Comments
No comments on this item Please log in to comment by clicking here