Monday, July 18, 2011

Bulletin: In surprise, Gannett doubles dividend; announces targeted $100 million stock buyback, as Q2 earnings per share fall to 58 cents vs. 61 cents

The just-announced dividend boost, to 8 cents from 4 cents, came moments ago in this announcement, which also discloses the equally surprising resumption of a share repurchase plan.

Here's the second-quarter earnings statement. Excluding special items, earnings per share were 58 cents vs. 61 cents a year ago. That's a penny higher than forecast by Wall Street analysts, in a survey by Thomson Financial.

Revenue totaled $1.33 billion, down 2.2% from a year ago, meeting Wall Street's forecast, on another steep decline in publishing advertising, which fell 6.5%.

During the quarter, Corporate once more slashed payrolls, by laying off 700 U.S. newspaper workers, while also ordering another round of unpaid furloughs for certain highly paid employees.

Investors rallied around the news: In pre-market trading, GCI's stock was recently up 5.2%, or 70 cents, to $14.80 a share, according to Google Finance.

In the statement, Chairman and CEO Craig Dubow says:

"Our results for the quarter reflect the positive impact of our ongoing efforts to focus on our customers and to meet their business and marketing needs across our platforms. This resulted in higher digital revenues for the quarter in each of our business segments. Company-wide digital revenues were up 13% compared to last year. Broadcasting segment revenue was up slightly overcoming the significant political advertising spends of last year.

"Each of our business segments was solidly profitable, due in part to our commitment to align our expenses with revenue opportunities. We accomplished this despite the continued challenging economic environments in many markets and the impact of the crisis in Japan on the supply chain and inventories for autos and consumer electronics.

"We also announced today that the board of directors has approved doubling the dividend and resuming share repurchases. We are able to take those actions because of the confidence we have in our long term growth prospects, our ability to consistently generate cash flow and the strength of our balance sheet."

The dividend increase is the first since the board slashed the payout 90% in February 2009, when the company was veering toward bankruptcy as the Great Recession enveloped the newspaper industry.

Dubow and COO Gracia Martore are scheduled to discuss the quarterly results and other developments with stock analysts during a 10 a.m. ET conference call. The call is open to the public on a listen-only basis; details here.

I plan to live-blog the conference.


  1. I'm going to sign up for my 3rd and 4th quarter furlough weeks right now.

    "Hey look, your furlough wasn't needed because of my bonus! It was that darn stock buy-back we had to fund!"

  2. Looks like the stock is going to open above $14. Watch out above!

  3. More spin from the CBA (chief bullshit artist). So at least he is trying to goose the stock price so his options are worth more. Way to go...

  4. Uh....right now the bid is 14.06 and the ask is 14.21. Sounds like it is going to open above 14 to me.

  5. $13.86 now...futures are seriously down this morning.
    Looks like the market is shrugging its shoulders at the buyback announcement. Proof that a lower supply of a crappy stock, going forward, does not raise demand.

  6. Dunno -- I'm no expert, but they beat the earnings per share estimate by 2 cents (0.58 vs 0.56).

    It doesn't seem like much to an outsider, but it's a fairly big deal. Stocks often get punished if they miss their earnings estimate by a penny.

    But publishing revenue continues to fall, so that ain't good.

  7. Gannett/ USA Today stock news makes the WCBS radio biz report at 25 past the hour.

  8. I am even more unhappy about that third furlough now. I hate Gannett.

  9. Profit drops 22% - down $44.5 million to $151.5 million, and Gannett doubles quarterly dividends and announces $100 million in stock buybacks to mask what will no doubt be more future declines. Brilliant.

    Frankly, if this transformation is working so well, then why haven’t Dubow, Matore et al backed it up by spending some of their money versus just shareholder’s, something they’ve yet to do ever since Gannett hit $2.11.?

  10. More of the same twisted corporate logic we saw back in the halcyon mid-2000s: Suck profits out of newspapers and TV stations to pay for dividend increases and McCorkindale/Dubow's famously ill-advised stock buybacks. Then, when regular cash flow is no longer enough to keep Wall Street hopped up, start firing workers through no fault of their own.

    So here we go again. Dubow & Co., unlike ALL OF THE MAJOR INVESTORS OF THE WORLD COMBINED, believes GCI to be undervalued and is now diverting the paychecks of laid-off workers into the dividend/buyback kitty. What a bunch of scammers.

    Jim, when you have time, please tally the cost of the dividend increase. Add that to the $100 million buyback and compare that to the estimated savings from all the Q2 layoffs (if they provide it).

  11. Estimates that div increase will cost $40 million. About the cost of a week of furloughs. Martore said well be "continually adjusting" on expenses based economics.

  12. $40 Million for dividend increase.

    $100 Million for stock buyback.

    Last time a Board Member other than Cody who joined this year bought Gannett stock with their own money? Nearly two years ago. Priceless.

    Charles Fruit 3/20/07
    Neal Shapiro 12/17/08
    Scott Mccune 12/29/08
    Arthur Harper 2/5/09
    Duncan McFarland 4/28/09
    Howard Elias 8/4/09
    John Cody 3/20/11


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