Thursday, October 25, 2012

Newspaper stocks tumble on surprise NYT Co. loss

Gannett's stock is down nearly 4% to $17.06 this morning after the New York Times Co. reported an unexpected loss for the third quarter. McClatchy also disclosed lower quarterly earnings today.

The NYT Co.'s loss from continuing operations was 1 cent a share, excluding severance and other costs, the company said today. Analysts had estimated a profit of 8 cents on average.

Advertising revenue fell 8.9% on a 11% decline in print ad sales. Digital advertising revenue decreased 2.2%. The company said it expects ad revenue trends for the fourth quarter to be similar to third-quarter levels.

NYT Co.'s shares plunged 15% to $9.09 -- the biggest intra-day drop since April 2009, according to Bloomberg News.

Other major publisher stocks fell, too: McClatchy was down 5.4% to $2.47, and Lee fell 0.7% to $1.49.

McClatchy's decline came after the publisher of the Miami Herald and Charlotte Observer reported lower quarterly results as well.

MNI said third quarter profits fell to $5.1 million from $9.4 million a year earlier. Per-share earnings fell to 6 cents from 11 cents. Throwing out various one-time adjustments, profits fell to $8.8 million from $10 million a year ago.

In contrast earlier this month, Gannett reported better than expected revenue and profits for the quarter, buoyed largely by strong political and Olympics advertising in the broadcasting division's 23 TV stations.


  1. And this surprised exactly whom?? The big surprise to me is that Lee has tripled since hitting 50 cents last year, although that's probably the Buffett Effect.

  2. Yes, I haven't understood the rise in newspaper stocks over the last year. None of the underlying challenges facing the business have been solved. The Times has done well increasing digital subscription revenue, but that's not enough when print ad revenue is dropping by double digits and even digital ad growth is in the red.

  3. How appropriate is it that dismal third quarter earnings for MNI come out on my last furlough day?

  4. Gannett stock taking a hit today. Glad I got out already.Gannett will be facing a tough year next year and their temporary gain by the transition from Print to Digital isn't going to hold up to the light of day in my humble opinion.

  5. 2:03,
    The way MNI is handing out furloughs these days it's entirely not surprising. They haven't scheduled first quarter 2013 furloughs - yet. However, I'm sure they will. So perhaps you will be on furlough in time to coincide with their dismal 4th quarter earnings report.

  6. SO Gannett beats expectations and many posters here continue to disparage leadership. These companies those same posters love to point as the best of the best (NYT)tank. Just saying.

  7. Comparing two companies is similar to the fools who say "the USA should be like [Germany, France, England, Japan, China, South Korea, Singapore]." Ridiculous, goofy, and basically useless.

    Neither company is growing strongly. That is not good. NYT may just be a fore-runner -- check the statistical stock-price beta on their stock compared to GCI. You know what a beta is, right?

  8. 4:54 the NYT LOST money. Gannett made money and beat expectations. Read a business book

  9. Gannett made money because its TV stations cleaned up on the Olympics and political ads. Print advertising was down almost 7 percent and digital revenue was up less than 5 percent. And the digital includes all the corporate products like PointRoll and Gannett's share in CareerBuilder. It's hard to imagine that individual newspapers saw much of a gain, if any, in their own digital sales.

    The New York Times just reported digital ad sales down 2 percent in the third quarter. If the Times can't pump up its digital ad sales, it's hard to imagine that places like Shreveport and Camden are doing it.

    If this pattern continues, I would expect Gannett to move toward separating print and broadcast/digital operations into separate companies, like Belo, Scripps and Media General have done.

    If that happens, the newspapers will be cut loose to sink or swim on their own. Some may be sold to patient investors, like those that bought the Mpls Star Tribune. Some will wind up in the hands of profiteers who will immediately move to slash employees and expenses, as is happening at the Tampa Tribune.

    Either way, I'd advise anyone working at a Gannett paper to not get too comfortable in the coming years.

  10. Newspapers are as dead as vaudeville, and no more likely to stage a comeback.

    It's almost 2013. Are people really still in denial?

  11. This comment has been removed by a blog administrator.

  12. Papers can't be slashed any more than they have unless they want to go back to being a weekly.

  13. John@10:42 In fact, Corporate counts ALL of CareerBuilder's revenue as Gannett's alone. (CB's profits, of course, are eventually split with the other two co-owners, McClatchy and Tribune.)

    Here's why:

    Gannett owns 52.9% of CB, so it's the controlling partner. As I understand it, accounting rules therefore allow GCI to count all the revenue as its own.

    It could be reasonably argued that this has the effect of making GCI's digital revenue much larger than it truly is. Keep this in mind the next time Corporate says digital revenue now accounts for more than 25% of total revenues.

    Here's how it's spelled out in the annual 10-K:

    "Net income in the Consolidated Statements of Income reflects 100% of CareerBuilder results as the company holds the controlling interest. Net income is subsequently adjusted to remove the noncontrolling interest to arrive at Net income attributable to Gannett Co., Inc."

  14. No one is disparaging leadership, 3:42. Geez, dont be so thin skinned.

  15. That's interesting, Jim -- thanks for the clarification.

  16. 9:14 forgot to look up advertising $ and revenue lines over time. Also does not understand concept of beta.

    He can now go back to his job as a Gannettoid CPA.

  17. Gannett stock fucked me again. If only i was handed it in buckets like management, i would be on easy street. And when they announce buybacks, can their motivs be any more self serving?


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