By the numbers: GCI vs. NYT, Washington Post

Compared to New York Times Co. and Washington Post Co., Gannett has long been known on Wall Street more for the quality of its earnings than the quality of its news gathering. That's why investors historically gave GCI's stock a higher "earnings multiple" -- or P/E, a smart reader notes in an e-mail.

But now, as investors steel themselves for the release of second-quarter earnings on Wednesday, my reader notes a fascinating trend: Compare the performance of GCI vs. New York Times and Washington Post Co. over the past five years, and you see Gannett's stock is now performing worse than the other two. Washington Post moved ahead in 2004; the NYT passed GCI four months ago, Yahoo Finance says, in this chart.

"In general," Investopedia says, "a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E."

Now, look at the current P/Es for the three companies:

• Gannett: 4
• NYT: 11
• Washington Post: 21

"That’s a pretty glaring difference,'' my reader says in an e-mail. "It shows that the Post’s diversification into other areas, mainly its Kaplan education biz, has buffered it from the downturn at the paper. Less so at the Times. E.W. Scripps wisely moved into cable programming that was lucrative enough for a spinoff. GCI has no such possibilities. I personally don’t see much prospect in a spinoff of local TV stations. How exciting could a standalone of bad Gannett TV stations be?"

Earlier: As media shares plunge, GCI skids another 4%

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