The decline disclosed moments ago sounds slightly worse than I expected. In a statement, however, Chairman and CEO Craig Dubow (left) says: "Although business conditions remain very challenging, we continue to transform all facets of the company as we position it for a more favorable economic environment and the opportunities we see in the changing media landscape."Earnings plunged 60%, to $77.4 million -- 34 cents per share -- from $191.8 million, or 84 cents a share, a year ago. Operating revenues dived 18%, to $1.38 billion from $1.68 billion. Ad sales plunged 34%.
Investors initially rallied to the news, before easing back: GCI's stock recently traded for $3.57 a share, up 2.3%, after jumping 10% at the opening bell, Google Finance says. In pre-market trading, shares had soared 22%. Also: Dubow discussed results during a 10 a.m. ET conference call with analysts. The recorded call is open to the public via Webcast; details here.Ad declines by category
Advertising revenues in the U.S. were 28.2% lower, the company said in the statement. At the company's U.K. Newsquest division, ad revenues declined 38.7%, in pounds. Companywide declines, by category:
- Retail: down 23.4%
- National: down 30.8%
- Classified: 46.5%
Circulation revenue was 3.1% lower in the quarter. Domestic circulation revenue increased 1%, reflecting recent single-copy and home delivery price increases in several markets and at USA Today.
At Gannett's struggling flagship, USAT, ad revenue fell 33.5% from a year ago. "Paid advertising pages totaled 527 compared with 826 in the same quarter of 2008," the statement says. "The telecommunications, pharmaceutical, and advocacy categories grew, but the gains were more than offset by losses in the entertainment, travel and financial categories."Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green rail, upper right.
Sinking ship!!! Maybe now is the tie for the two fucking idiots, Dubow and Martore, should leave!
ReplyDeleteMuch, much worse than I expected. I predict:
ReplyDelete1. Newsquest sold or folded. Probably the latter.
2. Major new cuts in TV newsrooms, with local news operations virtually eliminated. Corporte already heading in this direction.
3. Major restructuring at USAT this month.
But the report beat analysts expectations, so all is well.
ReplyDeleteI noticed this in my Sunday Detroit Freep--not nearly as many inserts as normal. I assumed it was due to the Easter weekend, but we'll see this Sunday if the trend continues.
ReplyDeleteAnd the intermittent nature of the printed paper has made me start to not care about my morning paper even on the days it arrives. I'm considering dropping my subscription. I probably won't just because I don't want to see more people lose their jobs.
dubow is not like the Captain of the Titanic. With the decisions being made and with the crew he has in the glass island he is more like the Skipper on Gilligan's Island. And we can all debate who is Gilligan
ReplyDeleteBut Craig, you are slashing away all the people who produce the content that brings people to the Web sites -- Gannett's future.
ReplyDeleteMaybe you can explain to everyone at 10 a.m. how this company will produce content so people will come to those Web sites in the future.
This so-called transformation is leaving the majority of your sites understaffed and overworked. And good people are walking out the door everyday either through their own choice or through layoffs.
folks we are going to hit, and hit hard. brace yourself.
ReplyDeletedon't renew a lease - go month to month. rent out a spare room to a college kid for the summer, or a foreclosure victim in your 'hood who wants to stay local. a family would love your basement or guest room so their kid can finish the school year, a huge issue for the foreclosure crowd. many have jobs but could not keep up with ARMs. they'll pay rent - ask your pastor. mine has a list of families who need shelter and can pay. my neighbor houses a single mom who works two jobs, she is never there but needed a mailing address for the teen. the teen is painting the house as barter. nice kid.
take on a moonlight gig - like UPS or other 24/7 operation.
don't lease a car, and try to turn yours in early. buy a junker - many on the market now at give-away prices. let your contract run out and switch to prepay cell phone - see Consumer Reports, you'll save about 40%. cut cable TV off and never eat out. hike your insurance deductibles to $5k for a 30% rate drop. compare online to see if you have the best prices.
save every penny of that tax refund.
pawn your gold - it is at record highs.
barter for haircuts, lawn mowing, catering, etc. conserve every dollar - this is mayday.
these quarterly results show that even an "improved" economy will not life this boat.
apply now for fall classes at comm. college or take the GRE or LSAT soon. don't commit to a big-ticket college you can't send your kid to after all. most of us did fine at state u., with loans.
cancel any trips, plant a garden and offer your house for sale. lease-purchase will appeal to a BK victim who has a job but no down payment and bad credit. apply some of their rent to a down, and you will find an applicant.
if you think I am exaggerating then you are mistaken.
retrain and good luck.
Can't see how this will bring anything but more pain to already stressed local operations.
ReplyDeleteHow does Dubow survive? Does he have pictures of board members in compromising positions?
60 percent decline in profit from a year ago.
Can't build new strategies that require start-up costs with that kind of position.
Understand the complexities of the stock, but only reason somebody is buying is they sense the place is going to go private. Perhaps management doing the buying, then slicing up parts of the company for sale to local interests.
Dumfounding.
It's like watching a bad movie over and over again.
The Market is OPEN!!! Hold on peeps here we go again : (
ReplyDeleteThe stock will go up today. The report came in better than Wall Street expectations.
ReplyDelete9:30 I agree. How does Dubow survive? He does not communicate to any of us where we are heading. The only communication we get from corporate is that furloughs, wage freezes and layoffs are coming. And we usually hear about those first on this blog.
ReplyDeleteI guess I wouldn't be so depressed about the state of the company if I knew what we are trying to do besides demolish it.
I wonder if this finally brings the kind of cuts, amputations, etc. at USAT that have been happening out in the "provinces."
ReplyDeleteOh, calm down everybody. Including you, Jim.
ReplyDeleteThis is not nearly as bad as anticipated or as previously announced last month (and you can credit both Craig Dubow and the departing Craig Moon for that).
The ships are turning into the right direction so keep your focus on your jobs and not on all this sky-is-falling speculation that plagues this blahg.
Word, cogs. This is actually pretty good given the circumstances.
ReplyDelete9:19 - thanks for coming out, now could you go back and hide under the bed again? sheesh.
Interesting that classified revenue is down 46% the day after TechDirt reports classified searches are up 84%. http://www.techdirt.com/articles/20090413/1313154486.shtml
ReplyDeleteSo quarterly profit is now under $100 million. How long before this number turns into a loss? Unlike most other media companies, Gannett is still profitable. If it ever becomes unprofitable, watch out.
ReplyDeleteI missed the discussion on the topic of a pension plan being under-funded and $11 million or $54 million. US pension plan or Europe? Union? Could someone clarify what they were talking about?
ReplyDeleteI just heard some major BS on the conference call. "Margins are not our primary concern". BS! At my site it is the ONLY thing they think about. Why are we killing profitable products that "only" have a 10% margin?
ReplyDeleteThis comment has been removed by a blog administrator.
ReplyDelete9:19 I suggest one more way to save you money. Drop your internet service. Just use the computer at work.
ReplyDeleteJust a guess but Gannett will probably be nearly alone among publishers that actually had an operating profit in the 1st quarter, traditionally the weakest for newspapers. Earnings down compared to last year but better than expected in the toughest economic environment any of us have ever seen.
ReplyDeleteWhile no longer with Gannett (or the industry), I would think that most current and former employees realize that all performance is relative and that Gannett appears to be better positioned financially than most traditional media enterprises and that shared sacrifices (furloughs, FTE reductions and generally tight expense controls) are helping GCI survive the economic maelstrom.
While new business models need to be fashioned for long term growth, survival is the first requisite of any business. Lots of smart, hard-working employees at Gannett, I believe give the company an edge over all of its peers.
From the call:
ReplyDeleteGracia said more printing will be consolidated. Look for Pensacola to be the model for larger papers to move into being printed by other dailies. 90 miles or less seems to be the sweet spot.
Daily circ excluding USA TODAY down 10% in Q1. That's trouble. On a base of 6.6 million, that's more than 600,000 copies.
USA TODAY will be down 7% to 7.5% in 1st Quarter... adding blue chip losses will total about 250,000 for Q2 2009 vs. year end 2008.
2nd Quarter furlough: officers of company and key management will take 1 week plus 1 week. 2 weeks total for "some portion" of our people.
3rd Quarter: We'll have to see what we have to do here on furloughs.
2010: Determination has not been made... analyst asked about 8-10% headcount reduction to carry expenses through in 2010.
Gannett is legendary for not adding headcount even if the economy improves.
9:19 a.m., my paranoid side hearts you.
ReplyDeleteMy logical side says much of what you have to say has merit, and would like to add an additional suggestion...and yeah, he knows how bad the economy is:
Start preparing for another career.
This will be easier for some of us than others. It may mean working jobs we don't like just to pay the bills. I know that it will be more of a challenge for older workers to do this.
I'm concerned though that this is going to come to pass for many of us anyway. So why not face the uncertainty and try to use it to our advantage...by taking it as an opportunity to do something else that not only could give us a better quality of life for ourselves and our families, but that we can be good at and enjoy?
10:19. I doubt USA Today will take the hits other Gannett properties have. I spent some time there a few years ago and was amazed at what a country club it is for the most part. I saw some tied to their desks and appeared to be working (always someone having to take up the slack for the slackers), but was astonished to see large groups of employees roaming the mammoth granite hallways, sipping lattes in the vast cafeteria/patio, playing ball on the grounds, taking walks around the campus, hanging out in the gym. Everywhere I went there were people basically goofing off. As I strolled through the newsroom, people were on eBay, talking on cellphones (I presumed personal calls) and watching TV at their desks. What an eye-opener. The most un-newspaper-like newspaper environment I have ever seen. How could this be a Gannett property, I wondered. I've visited several Gannett papers, and none had employees working at such a leisurely pace. The one Gannett paper I worked at had employees who had to do multiple jobs. It was actually quite unreasonable. At USA Today it took four people to do what one person did at my paper. Two extremes. Neither correct, in my opinion.
ReplyDeleteI am certain USATers will tell you that is no longer the case, or might deny my take entirely, but for a newspaper that is relatively small page-wise, and only publishes five days a week, it was stunning to see the abundance of bodies, not just in editorial, but everywhere, including corporate. I talked to one reporter who had been working on nothing else for weeks besides a feature piece which turned out to be a whopping 16 inches when finally published. I heard other tales also, of people being put on projects that allowed them to drag their feet, avoid other work, and essentially enjoy the amenities of the USA Today resort.
I attended several meetings where lots of time was spent accomplishing very little. People seemed to have all the time in the world to joke around, talk about their pets, movies. I couldn't even get a question answered because of the lack of focus or attention span. I have nothing against small talk, but again, this was unlike most meetings I attend, where people are stressed and wanting to get back to work because of pressing deadlines. In fact, I had no sense of deadlines at this paper. Granted, I usually departed by 7 or 8 p.m., but still.
Just calling it like I saw it. Not out to demean anyone, but this was anything but a sweatshop for most people. As I said, I did see some people with their noses to the grindstone. Appeared to me this paper was over staffed and spoiled. So when the bad times arrived, I just assumed they would get hit hard, probably harder than the community dailies which were always operated with bare bones. But the opposite apparently happened. The smaller papers absorbed far more losses.
2:19, 10:19 here -- you speak the truth, including that it's probably no longer quite the country-club atmosphere today at USAT that you remember back then. Still, it's got to be "better" (a most relative term) than most other Gannett "properties," I expect.
ReplyDeleteI left McPaper myself in that long-ago (it seems) buyout of December 2007, so I can only trade on what ex-colleagues occasionally tell me; but it's a less-happy place now than when I was there, and it was not happy then, either.
But back to my question: While things have tightened up considerably, it has not been nearly to the extent that other Gannett papers have suffered.
Maybe the answer is that, given the "brand" strength (being squandered, BTW, with each passing day), perhaps they figure USAT is the essential torso of post-newsaper-apocalypse business and the rest are dispensible, collateral limbs and such.
I'm not biz-savvy enough to know if that works or not, I'm just a little surprised the hammer hasn't fallen harder there yet.
Interesting that even with this news GCI is up 3% in trading today. I think we should lay off all the whiners.
ReplyDelete10:19 if you don't think cuts have been happening all along at USAT your head is so deep in the sand even your ass doesn't show.
1:03 you are definately insane if you think USAT has circulation of 6.6 million. Where have you been? Eating sand????
Please don't just blame Dubow.
ReplyDeleteMartore, who's steering this sinking ship, and crew must go.
Read the post... that's Gannett circ of 6.6 million according to GM on the conference call.
ReplyDeleteIt does say "excluding USA TODAY" if you read it.
I think that USA TODAY is about 2 million.
The Sandman
Wow! Today's announcement will be very, very, very bad news for the smaller community papers in places like Wisconsin, Indiana and Ohio.
ReplyDeleteEspecially in Ohio, where relative staff size is large compared to circulation numbers.
We will likely now see accelerated consolidation of news desks, more layoffs and maybe a few closings of papers completely.
If you work at ANY of these papers today, I'd get my affairs in order now, regardless of what your editor or department head is saying. ESPECIALLY if that department head is a Gannett corp "drop-in" manager. They are know for lying and looking truthful.
3:46, calm down, friend -- I never said cuts weren't happening at USAT, just that it seemed they weren't getting hammered quite as badly as the rest of the company.
ReplyDeleteBTW, what's this obsession and compulsion with sand, huh, pal? You need to relax on a beach somewhere ... oh, wait, no, too much sand there, and I wouldn't want you stumbling over my buried butt ...
XX,
10:19
Usat's online revenue is way off I see. Interesting how the suits gutted the paper and poured so many resources into the web site, including personnel, and still can't make any kind of decent money. Maybe the success of the paper and efforts of print people should have been appreciated more. Almost too late to revive the integrity of the paper. The heart and soul has been removed, trampled and scored by...well, you know who. The enemy is within. And there are many who have not only betrayed the brand, but betrayed numerous people along the way. Then they wonder why it's so tense lately or blame it on the state of the economy or business. Instead, they should look deeper into what they've done and they will see why things are the way they are.
ReplyDeleteAll of our pay cuts, furloughs and lost comrades came strictly in the name of profit preservation. Gannett's $77.4 million in net profit from $1.4 billion in total revenue comes to a 5.5 percent net profit margin, which would be HIGHLY enviable in most industries. The revenue will bounce back when new advertising channels solidify, but once again the company asserted its PROFIT OVER PEOPLE mission statement. Even though the total profit figure fell, almost all of what it reported will stay in the corporate wallet instead of going out as dividends. Take out the year-to-year comparisons, and you've got a company that should be high-fiving and lining up new golf outings.
ReplyDeleteThe big decline in revenue has as much to do with poor decisions by management regarding per column inch rate charges and postage paid weekly papers as the economy.
ReplyDeleteInteresting that classified revenue is down 46% the day after TechDirt reports classified searches are up 84%. http://www.techdirt.com/articles/20090413/1313154486.shtml
ReplyDelete4/16/2009 10:39 AM
Yeah, that seems indeed a little curious. Any plans on whipping up the classifieds? Seems to me that this is a dead horse. Are there any plans or is it dying a slow death????
Carriers in Wisconsin get rate cuts,some cut in half, because gas prices are low. Just wait until hyperinflation starts. Now have to take on more routes to make up for loss. Where's the government bailout?
ReplyDeleteGotta keep those presses running don't you?