Gannett's Q2 Earnings Down Slightly

By: (AP) Gannett Co., the nation's biggest newspaper publisher, posted a slight decline in second-quarter earnings Wednesday on lower broadcasting revenues and higher costs for interest and new presses at its Detroit newspaper.

Net income fell to $338.6 million in the period ended June 26 from $354.4 million a year earlier. On a per-share basis, earnings rose to $1.37 from a $1.30 due to fewer average shares outstanding in the latest quarter. That result matched the average estimate from analysts surveyed by Thomson Financial.

Revenue increased 3.4 percent to $1.94 billion from $1.87 billion.

Broadcasting revenues declined 6.9 percent in the quarter from the year-ago period due to the absence of political advertising as well as softer advertising demand, particularly in automotive ads.

Newspaper advertising rose 5.1 percent in the quarter as the company's U.S. newspapers reported strong local and help-wanted classified ads. But results at McLean, Va.-based Gannett's newspapers in the United Kingdom fell below last year's due to weaker demand for advertising as the U.K. economy slowed.

Interest expense rose to $48.4 million in the quarter versus $32 million a year ago due to higher short term rates and greater levels of debt due to share repurchases and acquisitions. Newsprint expense rose 7.2 percent due to higher prices.

At USA Today, the company's flagship newspaper, advertising revenues declined 1.4 percent while the number of paid advertising pages fell 6 percent to 1,191 from 1,267 in the year-ago period. Besides USA Today, Gannett publishes 100 other daily newspapers in the United States as well as hundreds of non-daily publications.

For the first six months of the year, Gannett's net income fell 3.9 percent to $604.4 million, or $2.41 a share, from $628.8 million, or $2.29 a share, in the same period a year ago. Six-month revenues rose 3.5 percent to $3.73 billion from $3.60 billion.

Shares of the company fell $1.02, or 1.4 percent, to $72.39 in morning trading on the New York Stock Exchange, where they have traded in a 52-week range of $70.54 to $87.