The nation's top newspaper publisher said preliminary net income fell to $158 million, or 69 cents per share, in the fourth quarter, down 36% from a year ago, as advertising revenue continues to take a beating because of the recession, the Associated Press said.
Operating revenue plunged 8.5%, to $1.74 billion, on a 23% drop in newspaper advertising sales. Wall Street media stock analysts had forecast $1.79 billion.Shareholders weren't happy. Gannett's stock recently traded for $6.04, down 12%. Still, that's above GCI's 52-week low, $5.
Gannett's earnings statement is now here.
Earlier: Quarterly earnings statements, plus CEO quotes
Please post details -- including the earnings statement itself -- in the comments section, below. And don't be shy about flagging the most interesting stuff you find; that'll give me a running start. (Yes, it's crowdsourcing! We did this last quarter, too.)
Wall Street had forecast declines for the quarter:
- Revenue: $1.79 billion vs. $1.9 billion a year ago
- Earnings: 81 cents a share vs. $1.28 a year ago
Shares closed yesterday at $6.90, down 43 cents.
I'll probably monitor the 10 a.m. ET listen-only conference call, where top GCI executives will answer questions from media stock analysts. The call will be webcast, and is open to the public, although only analysts get to pose questions. (Webcast details.)
[Image: Google Finance]
I'll probably monitor the 10 a.m. ET listen-only conference call, where top GCI executives will answer questions from media stock analysts. The call will be webcast, and is open to the public, although only analysts get to pose questions. (Webcast details.)
[Image: Google Finance]
Is it hard or easy to believe that the stock is down 80% from a year ago?
ReplyDeleteThere is life outside Gannett!
Reminder: Craig Dubow, Gannett chairman, president and chief executive officer, will take your questions in an audiocast at 1 p.m. (ET), Friday,Jan. 30 following Gannett's fourth-quarter conference call. Listen to the
ReplyDeleteaudiocast and send your questions now and during the audiocast by going to
http://gannett.gci/chat/live.asp?chatid=174.
We suggest you start your audio feed 10-15 minutes ahead of the actual event
time to check for sound. Talk with your local IT department if you have any
questions.
Jim, you should pretend you're an analyst from some boutique joint looking at covering GCI. When you get on to ask a question, then you could hit 'em hard with a REAL question, not the softballs they get from the regulars.
ReplyDeleteDo you mean Q4 2008? Your post says 2007.
ReplyDeleteActually it would be 2008 earnings, No? If it were 2007,I would still be on the payroll.
ReplyDeleteJim - anyone - Gannett's earnings are posted on Business wire as of 8:30 AM EST - but it's alot of stuff to read through, can someone read and summarize?
ReplyDeleteEarnings per diluted share of 69 cents, down from $1.06 in 4Q 2007. That reflects $56M in pre-tax severance costs but does not reflect a charge of $5-plus BILLION in non-cash charges for lost value of goodwill and intangibles that is still being calculated. (In other words, the "good name" of our properties and/or industry has fallen so far that value must be subtracted from the asset sheets.)
ReplyDeleteFriends, this does not look good at all. I don't want to be a doom sayer, but I would expect another deep round of layoffs soon. Plan accordingly.
http://tinyurl.com/cxynr5
ReplyDeleteReleased.
PUBLISHING
ReplyDeletePublishing segment operating revenues were $1.4 billion for the quarter compared to $1.7 billion in the fourth quarter of 2007, an 18.6 percent decline. Advertising revenues were $963.4 million compared to $1.2 billion in the fourth quarter of 2007. This advertising revenue decline of 22.7 percent for the publishing segment was driven by a 17.7 percent decline in the U.S. and a 29.3 percent decline in pounds at Newsquest, our operations in the UK. Retail advertising revenues were 13.9 percent lower, national revenues declined 18.2 percent and classified revenues were down 36.7 percent. For comparison purposes, the exchange rate of the British pound declined over 22 percent year-over-year. If the exchange rate had remained constant, total advertising revenues would have been 19.3 percent lower including declines of 11.9 percent in retail, 16.8 percent in national and 31.8 percent in classified.
Lower classified revenues were driven by declines of 45.7 percent in real estate, 47.5 percent in employment and 30.4 percent in automotive. For U.S. Community Publishing, classified revenues were down 30.7 percent comprised of declines of 32.9 percent in real estate, 46.5 percent in employment and 25.7 percent in automotive. In the UK, classified revenues were 35.3 percent lower, in pounds, reflecting declines of 57.7 percent in real estate, 35.2 percent in employment and 31.2 percent in automotive.
At USA TODAY, advertising revenues were 18.5 percent lower in the fourth quarter compared to the fourth quarter in 2007. Paid advertising pages totaled 788 compared with 1,045 in the same quarter of 2007. The telecommunications, financial and advocacy revenue categories grew compared to the fourth quarter last year but these gains were more than offset by losses in the entertainment, automotive, retail and travel categories.
Total publishing operating expenses were $1.2 billion, a 10.9 percent decline from the same quarter a year ago reflecting cost control efforts, offset, in part, by severance expenses. Publishing expenses, excluding severance expenses and the impairment charge in the year ago quarter, were 6.8 percent lower. Newsprint expenses were 2.0 percent higher for the quarter reflecting a 26.2 percent increase in usage prices which more than offset a 19.2 percent decline in consumption. Operating cash flow in the fourth quarter for the total publishing segment, which includes USA TODAY and Newsquest, was $209.9 million.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aqFUopBy8ZAk&refer=news
ReplyDelete$6 billion in goodwill write down. That's not good.
ReplyDeleteJim, in your first graf it should say 2008, correct?
ReplyDeleteThis morning, Gannett discloses fourth-quarter and year-end financial results for 2007, in a statement due about 8:30 ET. East Coast readers will see it long before I do, since I'm on the West Coast.
From AP on Forbes.com
ReplyDeleteUSA Today publisher Gannett Co. reported lower preliminary fourth-quarter earnings Friday, but even those profits will be wiped out once the company takes pretax writedowns of as much as $5.9 billion to reflect the declining value of its newspapers.
Gannett (nyse: GCI - news - people ), the nation's largest newspaper publisher, said preliminary net income fell to $158 million, or 69 cents per share, in the fourth quarter, down 36 percent from a year ago, as advertising revenue continues to take a beating because of the recession.
To realign costs with reduced revenue, Gannett slashed the work force at most of its U.S. newspapers by 10 percent and cut newsroom jobs at USA Today by about 5 percent late last year. Those moves, which preceded a one-week unpaid furlough that Gannett is imposing in the first quarter of 2009, resulted in pre-tax charges of $56 million.
Excluding severance charges, earnings were 85 cents a share, slightly above the 81 cents a share expected by analysts.
Revenue declined 8.5 percent to $1.74 billion, below expectations of $1.79 billion.
Gannett shares fell 46 cents, or 6.7 percent, to $6.44 in morning trading Friday.
The figures do not reflect the accounting writedowns, which Gannett expects to total $5.1 billion to $5.9 billion before taxes. The charges would reduce profits by $4.5 billion to $5.2 billion after taxes, the company said.
By law, companies are required to review annually the book values of their various assets and record charges against earnings if those values drop. Many newspaper companies have had to take such charges because long-term revenue prospects have declined along with the companies' stock prices. Gannett's stock fell 79 percent to $8 in 2008.
Although those writedowns do not affect Gannett's cash on hand or its day-to-day operations, a writedown of that size does reflect the company's grim assessment of itself.
Like other newspaper publishers, Gannett saw ad revenue begin to tumble over the summer as the recession compounded weaknesses from the migration of readers and advertisers to the Internet.
Gannett blamed the writedown on "the challenges facing the company's publishing businesses, including recessions in both the U.S. and the U.K. and their impact on advertising demand, and the decline generally in equity values and specifically its stock price."
Gannett said fourth-quarter advertising revenue in publishing fell 22.7 percent overall and 18.5 percent at USA Today, the nation's top-selling newspaper. Revenue from Gannett-owned television stations was about even, only because political ads early in the quarter offset softness in automobile, retail and elsewhere.
"Our results for the quarter reflect the unprecedented turmoil in the economies of both the U.S. and the UK and in the financial markets," Gannett Chief Executive Craig Dubow said. "The ongoing weakness in advertising demand had a significant impact on our results in both publishing and broadcasting this quarter."
For the full year, Gannett reported a net loss of $1.78 billion, or $7.81 per share, compared with profit of $1.06 billion, or $4.52 per share, in 2007. The 2008 loss, which does not include the expected fourth-quarter writedown for assets, largely reflected similar writedowns Gannett took in earlier quarters. Revenue dropped 9 percent to $6.77 billion.
Copyright 2008 Associated Press. All rights reserved.
Just can't wait to see the huge bonuses that will be awarded for this performance.
ReplyDeleteFrom Business Journal:
ReplyDeleteGannett Co. Inc.'s earnings fell by more than a third last quarter as fewer companies bought advertising in its publications and fewer customers bought them.
McLean-based Gannett (NYSE: GCI) reported Friday that earnings in the fourth quarter of 2008 were $158 million, or 69 cents per diluted share, compared to earnings in the fourth quarter 2007 of $245.3 million, or $1.06 per diluted share. The results include $36.1 million in after-tax severance expenses, a result of Gannett’s effort to reorganize and reduce its payroll costs.
Revenue in the quarter declined 8.5 percent to $1.74 billion from $1.9 billion in the year ago period. Publishing advertising revenue slumped 23 percent. Circulation revenue dropped 3.4 percent. Broadcasting revenue edged ahead 0.4 percent.
Gannett said that the results were preliminary since the company is still calculating the write down of goodwill and other assets that could reach $5.2 billion after-tax. In the year-ago period, write downs totaled $50.8 million.
Obviously, the board of directors has no shame.
ReplyDeleteIn Japan, anyone that was in charge of a company that did this bad would resign in disGRACIA.
Listened in to the call... who is the CEO at Gannett?
ReplyDeleteGracia just takes control and answers every question. That's got to be embarrassing for Craig Dubow.
Watch how they address that in the Q1 call in three months... they're going to put the muzzle on GM.
Hand picked by Doug? Part of Doug's legacy must be that he wasn't there when Craig flew this company right into the ground.
Head count reduction according to GM was about "4,000 FTEs across all segments." Incredible.
And she cut the call Q and A short.
In Martore's defense, she is the CFO. Industry analysts pay almost no attention to the CEO of any company any more at financial reporting time. Martore's legal responsibility is not to Dubow.
ReplyDeleteAs a retiree, the information on the conference call about the underfunded pension plan was pretty upsetting. If I heard correctly, the unfunded pension liability was $150 million last year and is now between $575-$590 million? The analyst asking the question suggested the amount might be as much as $850 million.
ReplyDeleteGracia declined to suggest when the company might begin depositing money to reduce that amount. She said there would be no cash contribution in 2009?
Some people here have said they hope the company goes down in flames. If that happened, my pension probably would be cents on the dollar.
So I'm praying that somehow Gannett succeeds in the next decade. Selfish, I know.
But thank to the buyouts, there are a lot more of us depending on Gannett's prosperity than ever before.
8:45 AM said, "Friends, this does not look good at all. I don't want to be a doom sayer, but I would expect another deep round of layoffs soon. Plan accordingly."
ReplyDeleteI agree. Plus, at least another week of furlough for everyone sometime after March.
Gannett likes to pass itself off as a victim of the economy when the only thing being victimized is its own greed. Take a look at those fourth-quarter profit margins -- a 9 percent net profit margin, or 9 cents of profit for every dollar of revenue. On a gross, pre-tax basis, the margin was 11.7 percent. We are still talking outsized profits compared to most industries in the U.S., including the oil companies. Gannett has been screwing advertisers during most of its existence by raising rates even as the size and quality of its papers/stations have declined. Those gouged revenues, of course, enabled the company to afford higher salaries for employees, but Gannett got too greedy for its own good on what it pocketed after expenses. It was all about sucking up to Wall Street, padding profits at every turn and paying out higher and higher dividends. Speaking of dividends, 53 percent of the fourth-quarter net profit was paid out in dividends. Don't know what that is in dollars offhand, but that money needs to be reinvested in the company. Gannett is a technology laggard, and is notorious for its substandard management.
ReplyDelete11:28am - that's why i cashed my pension and took the hit with taxes and fines...it's better than what it'll end up as.
ReplyDelete11:37, you didn't have to take a hit -- you could have rolled it into an IRA.
ReplyDeleteThat's what I did.
In Japan, they would not quit for this performance, they would do the honorable thing.....and kill themselves.
ReplyDeleteDoug Dougie (I'll Borrow $3.5 Billion to Buy Too Many Newspapers for Too Much $$) McCorkingdale get Life-time health coverage......if so that should be pulled.
11:34:
ReplyDelete"It was all about sucking up to Wall Street, padding profits at every turn and paying out higher and higher dividends. Speaking of dividends, 53 percent of the fourth-quarter net profit was paid out in dividends"
Wow. Amazing number.
Not a business major here, but isn't the 5.6 billion write off basically on paper? Value of good will/assets?
ReplyDelete11:34 The last time I saw GCI invest in technology, the execs here all got big screen TVs installed in their office and cable connections so they can watch the stock market. Our computer operations suck, but these bigwigs don't care. They haven't really thought ContentOne through yet, because if they had, they would realize that centralization of features, etc., will require centralization of computers, and everyone of the operations running the same software. It won't work to dump a layout made on Apples into a system that runs Windows. Idiots.
ReplyDeleteIncredible, my pension is worthless, or soon will be, and they are paying millions for a Careerbuilder commercial for the superbowl. Can't they use that money for my pension?
ReplyDeleteA 13 percent loss, and it is only noon here. Unbelievable. Martore said in the call-in that the board will consider the dividend next month, which is probably one of the reasons the stock is collapsing. Dividend investors are going to dump this stock if they touch that dividend.
ReplyDeleteHot damn, 1 more minute until our fearless leader speaks to the masses.
ReplyDeletePerhaps the Board needs to oust Dubow. The company has taken a nose dive since he took over. You can blame the ecomony but I also blame management and their lack of leadership.
ReplyDelete"...will require centralization of computers, and everyone of the operations running the same software."
ReplyDeleteThat used to be true until the company threw Publicus/Saxotech into the mix. Like it or not, it's the common technology platform that everyone's on now. Problem is - we never utilized it as such. Newsrooms balked at web-based publication software and initially dismissed it as a "web tool" only. In reality, it is the common base technology that Gannett sites all share. Except, of course, we never understood the opportunities that this standardization gives us.
Unfortunately we missed the big advantage that Publicus offers us which is centralized reverse publishing directly from Saxotech's SQL database. Gannett took it's eye off the prize. The big change in how we were supposed to do business in the digital age never happened and was never even fully understood.
If and when they finally do something about the outrageous dividend, the stock will see a major sell off and tank big time. Of course the present state of affairs and poor management will do a pretty good job destroying stock value in the meantime.
ReplyDeleteU572 could not dive faster than our stock is!
ReplyDeleteWhen I was in college taking the required economics courses, I was taugh that investors in a company were taking a gamble that they would make money after the company paid all expenditures (payroll, loans, etc.), reinvested in the comany's growth and took care of other expenses.
ReplyDeleteOnly then would the investors get their profit.
When did the model turn upside down so that now a stockholder and Wall Street are guaranteed the money before everything else?
Dubow is awfully dismissive of the impact of the $5.9 billion goodwill writedown. That move wipes out 44 percent of Gannett's total assets as stated on Sept. 30 and lowers Gannett's total equity to $900 million. As a result, what had been a long-term debt-to-equity ratio of 59 percent percent could be about 400 percent as of Dec. 31, using the Sept. 30 long-term debt figure of $3.9 billion. This makes the company's debt burden, creditworthiness and overall investmentworthiness all the worse. In downturns like this one, investors try to find stocks that have little or no debt. A first glance at Gannett's balance sheet will turn those investors away.
ReplyDelete"Dubow is awfully dismissive"
ReplyDeleteWouldn't you be if you were stripping the company down to it's bare bones hoping for a sale?
10:56: Martore controls GCI, not Dubow. Dubow takes his marching orders from Martore. They both need to step down.
ReplyDelete11:49,
ReplyDeleteMcCorkindale still has full-time staff working for him at Crystal Palace.
1:36 Don't forget to add in the $1.5 billion long-term loan they drew in October, part of which was to buy Ripple6
ReplyDeleteCorporate greed on the record for 2008 now. Yippee. Gordon Gecko is alive and well and has been all along.
ReplyDelete"All politics are local." So is the creation of the ax-list for the past two layoffs and any layoffs coming up.
Do you really think Craig Dubow knows you or gives a flying frick about you? It's all local.
The last list was due from individual sites Nov. 14. They laid us off on Dec. 2. Rumor has it, first lists at many sites were rejected by corporate. Why? Too many old fogies on them? Too much severance to pay out? Too many WASPS? Not enough of 'em? Too many men in, say, their late 40s? Too many old, overweight women?
These lists come from your AME's and EE's with a lot of help from their "friends" in the operation. Corporate just makes sure the lists are lawsuit-proof.parmac
As I've said before, GANNETT'S Long-Term Value = (to quote Dean Wormer) ZERO-POINT-ZERO.
ReplyDeleteAdvice from Dean Wormer to Craig & Gracia:
"Fat, Drunk & Stupid is no way to go through life."
2:58 is right. Anyone who thinks those layoff lists were generated anywhere BUT in the local shops - well, I have a spot in the Illinois political scene to sell you.
ReplyDeleteOf course the layoff lists are generated locally. We've known that all along. The (publishers) are told to submit names to corporate. No news there. Most likely they have a list already to go for any upcoming layoffs. For now I will take furloughs, thank you. Better than nothing!
ReplyDeleteGet ready for something big. Either an outright bankruptcy, or a serious merger and industry consolidation.
ReplyDeleteThere is no way out. The only thing left unwritten is the final chapter.
It's downright criminal what Martore and Dubow have done to the company. But greed is alive and well in McLean. Their bonuses won't suffer, that's for sure.
next will be to cut the dividend and then suspend the 401K match, then begin selling properties
ReplyDeleteGCI needs to move out of and get rid of Crystal Palace. It's time to stop making the fashion statement that they have the largest and fanciest property in the neighborhood. And they can stop paying someone with a dog to chase the geese off the grounds.
ReplyDeleteCan someone explain why Matores'
ReplyDeletestatement :"Our unfunded obligation though on that plan at the end of 2008 is going to be somewhere in the $575 to $590 million range. Obviously there are a lot of factors at play. There's discount rates, how the market continues to fare; if there is the possibility for governmental relief, but as things stand today that number would be funded over the next seven years."
Why are they not required to fund in 2009 our pension shortfall?
Isn't this the same crooks that changed the plan to enable their
retirement $$$ funds, which were not insured into the general pension fund in case of bankruptcy of GCI?
Do you really think GCI has seven years of life left? I sure don't.
Sure glad I took my pension $$$ in a lump sum rollover. Sounds like most others should as well.
In the new movie out this summer, Dobow is Bush and Matore is Cheney. The King and the Prince of Darkness.
ReplyDeleteWonder if, when the stocks takes a dive after the dividend is reduced to zero, that Gannett will use the credit line to buy back all the stock and go private. Then they can do anything.
I opted for the Voluntary Layoffs in December 2008 - felt after 26 years I should get out now while I could. Have not heard or seen anything on my pension. Checked with Corporate and they said I should have something in 45-60 days. They had all my paperwork and were doing the calculations. That has passed and I still have received nothing. I would say pensions are being messed with. Get out now while you have a chance of getting your pension.
ReplyDelete