Monday, July 16, 2012

Urgent: second-quarter earnings and revenue fall; but results are better than expected; stock choppy

[Updated at 10:38 a.m. ET.]

Corporate's just-issued statement is here. CEO Gracia Martore and other executives are now discussing the results with Wall Street analysts during a teleconference that started at 10 a.m. It's open to the public; details. I'm monitoring the conference.

So far, investor reaction is uneven. Gannett's stock recently traded for $14.86 a share, up nearly 4%, after climbing as high as 7%, to $15.27 a share.

  • Earnings per diluted share, on a GAAP (generally accepted accounting principles) basis were 51 cents for the second quarter of 2012 compared to 62 cents for the second quarter of 2011. (In its story, Reuters is focusing on these figures, rather than the ones in the next bullet.)
  • Excluding special items in 2012 and 2011, second quarter earnings per diluted share were 56 cents compared to 58 cent for the same quarter last year. (Wall Street appears to be paying more attention to these figures, however, because the 56 cents EPS is better than expected.)
  • Revenue was $1.31 billion vs. $1.33 billion last year -- in line with analysts' expectations.
  • Newspaper and other publishing advertising plunged 8.1% from last year
  • Wow: National advertising, which is mostly from USA Today, plummeted 17%
  • Digital Segment revenue growth continues to slow. The segment, which includes CareerBuilder, reported $181.3 million in revenue -- up 4.5% from last year. In the comparable quarter a year ago, it rose 12.6%.
This spreadsheet shows quarterly revenue changes by division from Q1 last year through this year's Q2.


    1. The company spent $45 million to repurchase stock. Given the choice between paying employees a full year's pay and repurchasing stock, Gannett chose to repurchase stock.

      Seriously: There's nothing better to do with $45 million than buy back stock? Nothing comes to mind? Anything?

    2. Drops in publishing advertising of 8% and National Advertising dropping 17% means the lost revenue will have to be made up somewhere else. Look for 3rd and 4th quarters to look better due to political advertising which means next years 3rd and 4th quarters will be down substantially. If 1st and 2nd quarters of 2013 are similar to this year, next year will determine what Gannett will dramatically change the Gannett print landscape as dictated by revenue.

    3. She's foolin' The Street.
      For today, anyway.

    4. Well, 9:42 AM, Gracia probably wanted to donate it to the Dubow Neighborhood Improvement Committee" but couldn't find an actuarial explanation!

    5. What did they just say?
      Big spike down in GCI last 5 minutes.

      Congrats to the shorts!

    6. I've now listened to the entire conference call; not sure I heard any headline-grabbing news, however.

    7. Jim, thanks for including both real numbers along with percentages. Poynter just has percentages. Another epic fail on their part.

    8. Stock is up 3% at noon! Go, GCI, go! Get on up, Big Bird!

    9. Why arent heAds rolling over the 17% drop in national advertising? Or will that come from editorial?

    10. TV revenue in Q2 rose 11% thanks to political and automotive advertising. Retransmission consent revenue was up 17% -- an increasingly important sector for local TV.

      Anon@943A: Gannett expects its TV revenue in Q3 to be up over 30% as a result of the Olympics and political campaigns. (Gannett's TV stations are mainly NBC.)

    11. Profit is up -- The Street likes it. Good job by our new CEO.

    12. 2:43 You are misreading today's report. Earnings (profit) are down significantly from a year ago. They just aren't down as much as Wall Street had expected.

    13. 12:25,
      The ex-SVP has already paid for that performance with his job. Someone else gets to pay for Q3 and Q4 when those results roll in.

    14. How does someone look at the report and think profit is up as 2:43 suggests. Profit was down but not as much as expected. How can anybody mis-read that?

    15. TV is carrying Gannett these days. Speaking on the earnings call this morning, Broadcasting President Dave Lougee said Gannett has "significantly more dollars on the books" for the upcoming Olympics than for Beijing 2008.

      With Gannett's local stations #1 or #2 in most of their regions, you wonder why corporate never spun off its newspaper holdings as Media General has done.

    16. With most of the quarterly and year-over-year numbers DOWN, pay for performance means, as Gannett defines it, increased BONUSES.

      Recent history says, stay tuned for the "good news."



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