They're forecasting earnings per share of 57 cents, down 6.6% from 61 cents a year ago, according to a survey by Thomson Financial. The eight analysts following GCI expect revenue of $1.33 billion, down 2.6% from $1.37 billion a year ago.
Indeed, for the rest of the year, analysts expect EPS and revenue to continue dropping. For all of 2011, they forecast EPS of $2.17, down 11% from $2.44 last year. Annual revenue is expected to come in at $5.3 billion vs. $5.44 billion.
Other publishers, including McClatchy and the New York Times Co., also are expected to report very weak second-quarter figures.
During GCI's first quarter, overall revenue fell 3.7%, to $1.25 billion from $1.3 billion a year before. EPS plunged 23%, to 37 cents vs. 48 cents.
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| Dubow |
That call will be webcast from Corporate's site, and is open to the general public on a listen-only basis; details here. I plan to live-blog the conference again.
Quarterly earnings reports sometimes also are occasions for other, non-financial news, such as management changes.
GCI's stock fell 6% from the first quarter to the end of the second quarter. The widely watched S&P 500 index, a broad measure of overall market activity, was basically unchanged. Still, GCI is up 6.4% from a year ago, while the S&P rose a more robust 28%.
The company has recently taken steps to shore up profits in the current quarter: It laid off 700 U.S. newspaper workers last month, and imposed unpaid furloughs on certain highly paid employees.
U.S. newspapers chief Bob Dickey said he expected more newspaper layoffs this year through consolidations such as the five News Design Studios, which will produce pages for most of the company's 80 community dailies. His remarks, the day after announcing the 700 layoffs, have led some Gannett Bloggers to worry that another, broad job reduction is in the works.
Related: here is GCI's first-quarter financial results announcement.
One of these days the board of directors is going to live to its fiduciary duty to shareholders by hiring an investment banking firm to advise it on the breakup of the company and the sale of its parts. New owners, especially local owners, would be more attuned to single TV stations and newspapers and might be more willing to invest in news gathering than Gannett. As of now, the individual "properties" exist solely to generate profit for a useless holding company and management team. That money would be better spent investing in reporters and photographers.
ReplyDelete8:22 Bingo. You win the prize.
ReplyDelete8:22 a.m. said: One of these days the board of directors is going to live to its fiduciary duty to shareholders by hiring an investment banking firm to advise it on the breakup of the company and the sale of its parts.
ReplyDeleteYes, 8:22, that may well happen, though I know of no public news that would suggest it is imminent. But, at current stock prices, the parts are worth more than the whole. Which is why you see the stock trading sideways at $12-ish to $14-ish even in bad markets. The value inherent in the parts helps provide a floor on the stock price. Doesn't mean it can't go below $12 or above $14 soon -- it certainly can and probably will. But the market -- AKA the "wisdom of crowds" -- has made up its mind here on a "reasonable" sum-of-the-parts valuation.
Revenue is key to the future more so than earnings. GCI (or any other company) can create earnings with cost cuts. Indeed, few are is better at that than GCI. The market knows this. But top lines, unlike bottom lines, can't be gamed. On good evidence that 1. GCI has stabilized revenues and 2. created a sustainable digital future, then GCI is a $25 stock -- maybe a $30 stock. Perhaps, in time, even more.
For those who bought during Armageddon in 2008-09, this is all good. For those who bought at far higher prices, not so good. In stocks, as in some other areas of life (real estate and collectibles, for example) you make your money when you buy, not when you sell.
Interesting column by Jackson Clarion-Ledger editorial director David Hampton 6/17. Column was about lack of interest in state elections and why. Then this revealing comment -- Serious objective media coverage is diminished with fewer resources devoted to politics. That is just a reality, and not a very healthy one.
ReplyDeleteIn other words, we ain't doing our duty and reporting the news.
Oops! Too early and weak coffee. Hampton's column was today 7/17, not 6/17.
ReplyDeleteAdding to 9:35's good analysis: the board will wake up when three things happen:
ReplyDelete1. A big investor, or group of big ones, concludes market conditions are ripe for a breakup.
2. They accumulate enough shares to push for a sale of the company.
3. TheY then insist the board move toward a sale or risk being ousted during the next board elections.
This is what happened to Knight-Ridder, and many of its shareholders are mighty glad. (Emoloyees and readers might feel otherwise.)
The first post (8:22am) is one of the most spot-on I've read in a while. And proof that it does not take a $9.4M/yr. CEO to see that solution.
ReplyDeleteBuy on the dip, if there is one following the earnings announcement. Remember, 2012 ia a big elections year and Broadcast will be raking in the ad dollars. With a multi-candidate GOP primary for President, the ad revenues should be gigantic. Thing long-term, 12 months out, and buy GCI!
ReplyDeleteIf a breakup of Gannett happens employees will yet again bear the brunt of even more cost cuts, all to pay the "new" debt the deal causes. The players in this deal, which will surely be the CEO, et al, and anyone who questions said "deal" (bonuses to get them on board) will ultimately make out like bandits.
ReplyDeleteEmployeees will have different owners but will be making less.... and you know what? If it gets Gannett out of our lives, I'm all for it!
So Jim if the quarterly call shows improved eRnings what is your plan? Whom do you castigate?
ReplyDelete1:05 p.m. If Gannett shows improved earnings, I will be wondering why we have to take a third furlough.
ReplyDeleteYou already know what his plan is. It's the same one as when he started the blog. He'll wait for some anonymous poo-flinger to come in throwing baseless accusations.
ReplyDeleteSounds like you are describing Carl Icahn. He does know how to unlock shareholder value:
ReplyDelete1. A big investor, or group of big ones, concludes market conditions are ripe for a breakup.
2. They accumulate enough shares to push for a sale of the company.
3. TheY then insist the board move toward a sale or risk being ousted during the next board elections
1:42 Yes, but if I were Icahn, an even bigger prize is in sight as Murdoch's empire is fast unraveling. The latest chapter comes Tuesday at a parliamentary hearing in England where I expect the police will confess their involvement in selling info to the papers. This is really a big deal because the bobbies have tremendous authority in England. Murdoch is going to be skinned, I expect, and now the FBI is checking things on this side of the pond, I wonder which investment houses are shaking in their boots. About two decades ago, the WSJ got J. Foster Winans, a son of a prominent Maryland family, and they are still mad as hell at the WSJ for the embarrassment.
ReplyDeleteFrom little acorns do might oaks grow.
http://en.wikipedia.org/wiki/R._Foster_Winans
... mighty ....
ReplyDeleteAs some have pointed out, the breakup value of Gannett might be less than it would have been several years ago, and not merely because the newspaper industry has continued to slide.
ReplyDeleteA lot of papers don't have printing presses anymore, don't have HR departments, don't have designers or copy editors, etc.
Anyone who bought one of these individual papers would have to recreate a lot of core functions.
The key to the breakup would be the value of the company's TV stations and digital properties (CareerBuilder, PointRoll, etc.) Those could thrive without the newspapers holding them back. The problem is: Who would want to buy the newspapers, particularly financial losers like Detroit?
ReplyDeleteBe careful about wishing for a break up. Lots of us lose jobs under the new owner
ReplyDeleteTomorrow's Acronym of the Day:
ReplyDeleteBOHICA!
Jobs will be sliced wholesale if there isna takeover. Worse; Change of control provisions will make Dontbow & Co. Extremely wealthy. Multi million dollar payouts that make their annual compensation pale in comparison. The best thing that could happen is if craig just leaves.
ReplyDeleteHow this useless pos got the ceo slot is beyond comprehension. Is this mccorkindale's doing?
ReplyDelete9:10PM, let's be a little more specific, a highly compensated POS!
ReplyDeleteWhether he remains in charge of Gannett as an independent company or if he engineers a buyout, Dubow is looking at even greater paydays ahead. Staying the course would allow himself to be paid as generously as ever, while employees endure pay freezes, unpaid furloughs, misery, etc. and shareholders see their holdings flop around in value on the markdown table. Selling the company would be a smart move on Dubow's part. He would make a killing financially in lump sums, a fat bonus, accelerated vesting of options and a rich consulting deal. Plus it would allow the board to praise his acumen for negotiating a sale that allowed shareholders to sell their stock for a 20 or 30 percent premium, say $18 a share. For workers, the new owner would represent a huge uncertainty. But since Gannett already performed the ugly human massacres, there couldn't be much more to cut other than overpaid dufus publishers and editors. Personally I would welcome a new owner.
ReplyDelete