Gannett shares just closed at $14.93, down 2.9%, on a day when markets overall were higher. The decline followed this afternoon's presentation to Wall Street media stock analysts. Earlier today, GCI traded as low as $14.64. Investors reacted to Corporate's revenue and earnings forecasts, including a statement that included the following key information, attributed to COO Gracia Martore:
"Certain sectors of the economy here in the U.S. are showing signs of growth and that is reflected in our results. Our domestic publishing results continue to reflect strength in the auto and employment categories. Firming employment ad demand impacted our digital segment as well, resulting in significant revenue growth. Our cross-platform sales efforts continue to take hold as digital revenue company-wide was 12% higher through February, reflecting solid growth in publishing and broadcasting digital revenue. We expect the percentage decline of revenues in our publishing segment to be in the 6% to 7% range in the first quarter while total television revenue will decline a little over 2%, reflecting the absence of over $24 million in Olympic, political and Super Bowl spending. Excluding the incremental impact of these events, total television revenues will be up approximately 6% to 7%."
Martore also provided earnings per share guidance for the first quarter. "Based on current trends, we expect to achieve the First Call consensus of first quarter earnings per share estimates of 41 cents. We expect to reduce debt by approximately $150 million in the quarter and will end the first quarter with debt outstanding of approximately $2.2 billion."
A worrisome trend?
Now, compare Martore's new publishing segment revenue forecast for the current quarter -- a decline of 6%-7% -- to the actual results in the fourth quarter: "Publishing segment operating revenues were $1.1 billion for the quarter, a decline of 4.7% compared to the fourth quarter in 2009."
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| Martore |
Martore also provided earnings per share guidance for the first quarter. "Based on current trends, we expect to achieve the First Call consensus of first quarter earnings per share estimates of 41 cents. We expect to reduce debt by approximately $150 million in the quarter and will end the first quarter with debt outstanding of approximately $2.2 billion."
A worrisome trend?
Now, compare Martore's new publishing segment revenue forecast for the current quarter -- a decline of 6%-7% -- to the actual results in the fourth quarter: "Publishing segment operating revenues were $1.1 billion for the quarter, a decline of 4.7% compared to the fourth quarter in 2009."
I was away from the web during the presentation, so need to listen to the recording when it becomes available later today.
ReplyDeleteSurprise, surprise. Gee, can anyone who reads this blog wonder why publishing revenue is off at escalating amounts?
ReplyDeleteI saw Saridakis give a presentation on media and technology last week and he was asked directly about Gannett and the "shelf life" of the newspaper industry. His response was very direct..."There is no more 'shelf' for the newspaper. Companies like Gannett are in denial and cannot adapt to changes in technology and consumer behavior fast enough..."
ReplyDeleteHe is so accurate. I have worked at a Gannett for over 12 years and at first I was in denial, but he laid out a very compelling case and I finally see the writing on the wall. I need to get out of here.
If I were one of the analysts, I would ask the simple question... "So when do you expect revenues to start increasing?" And if they gave me any BS answer I would keep asking the question and pointing out to them that they keep saying the same thing over and over and revenue still continues to decline.
ReplyDelete5:23 p.m.: Your post reminds me of an Albert Einstein quote.
ReplyDeleteInsanity: doing the same thing over and over again and expecting different results.
All of what Martore said equals one thing: layoffs. There will be more this year and next year.
ReplyDeleteAh, but there's a silver cloud: more bonuses for Martore, Dubow, Dickey, Hunke, etc etc.
Praise the board!
I agree with that Saridakis quote. We are moving so fast with new technologies and apps that it is very difficult to keep up. I assume some of these are fads, perhaps Facebook, yet I look at their readership and it is astonishing. There are others out there replicating Facebook, so perhaps the audience will migrate there. But what is clear to me is the audience isn't migrating back to Gannett's newspapers, and that is a killer for us all. Without the audience, we don't have currency. We are resting on our laurels believing USA Today is a compelling read that has a following. Yes, but it is a declining audience. If we are to survive in this culture, we have to develop something new and unique. Keep doing what we are doing, and we are dead meat simply because adverisers will abandon us for the flavor of the month, and readers will give up.
ReplyDeleteRevenue down, so Gannett cuts cost. Cost cutting diminishes the quality of the product. The product becomes less appealing (Have you felt the weight of a Monday paper recently?), so the audience shrinks, advertisers go away, and revenue continues to plunge. This cycle will continue until there is nothing left of Gannett. Excuse me, G A N N E T T
ReplyDeleteThey always attribute their success to their talent and poor results to "the economy." Guess what? The economy is in MUCH better shape than it was in 2009. Gannett's revenue, however, is still down.
ReplyDeleteThe good news: lousy earnings/revenues forecasts still = bonuses and pay raises for senior management. And Borat will be joining the board this year to ensure more Happy Times.
ReplyDelete