Gannett Warns Of Lower Profits

By: (AP) Gannett Co. Inc., the nation's largest newspaper publisher, warned investors Friday that its third quarter earnings could be as much as 15% to 20% below last year's levels because of the impact on advertising following the terrorist attacks last week.

Gannett, which publishes USA Today and 96 other daily newspapers, earned 79 cents per share in the third quarter of last year, meaning that this year's results could be as low as 63 cents a share, well below analysts' current consensus forecast of 73 cents, as compiled by Thomson Financial/First Call.

Despite the profit warning, Gannett's shares moved higher Friday as did those of other newspaper publishers, which have been sold off aggressively since the markets reopened Monday following the attacks.

Gannett shares were up $1.75 at $57.30 in afternoon trading on the New York Stock Exchange.

Other major newspaper publishers have also warned that the attacks could hurt their results by impacting advertising revenues. Tribune Co., Knight Ridder, Dow Jones & Co., and The New York Times Co. have all issued warnings.

Entertainment companies that rely on advertising are also expected to feel the impact. Viacom Inc., which owns CBS, MTV, and other media properties, warned of lower cash flow following the attacks, and Walt Disney Co. said Thursday that while its businesses had been "adversely impacted," it was too soon to quantify the effect on its earnings.