Monday, October 21, 2013

I'm now live-blogging the Q3 analyst conference

CEO Gracia Martore and other top executives are discussing the just-released third-quarter financial statement with stock analysts this morning. The 10 a.m. ET conference, lasting about an hour, is being webcast in listen-only mode for the general public. How to participate.

11:05 We're done. GCI's stock is still down. It recently traded for $25.78, down $1.71, or 6.2%.

11:03 Among last questions, what's status of Belo takeover given the federal government shutdown's delaying regulatory approval? "We are moving as expeditiously as we can," Martore says.

10:49 Martore and CFO Victoria Harker sound just a tiny bit rattled in answering some of these questions, and none of them are especially tough.

10:42 Digital-only subscriptions sales update? (Was 65,000 sold, the questioner says.) After much dancing around, Martore says 75,000 to 80,000 sold, when not including those who have since upgraded to add print. She says this is one of the "least significant "metrics they've used to gauge success of the paywall. What no one mentions is that Martore has been forecasting 250,000 to 300,000 digital-only subs by the end of the year. Clearly, the company will not come close to hitting that target.

10:29 Is there another subscription rate increase in the works? Newspaper division president Bob Dickey says "at this point in time we have not announced any.'' But he says they are experimenting with some in select markets.

10:28 The Q&A portion has begun. Martore is talking about impact of the federal government shutdown.

10:16 GCI's stock is now trading for $25.86, down $1.61, or 5.9%.

10:12 Big news is that overall revenue fell to $1.25 billion, down 4.3%. Wall Street had forecast $1.27 billion. But adjusted earnings per share were 43 cents, better than the 41 cents' forecast.

10:06 Among the highlights from the press release, newspaper and other print ad revenue fell 5.9%, steeper than the 5.4% in the second quarter. This is the third consecutive quarter of widening declines. But Digital Segment revenue rose 5%, a better performance than during Q2.

10:02 a.m. Martore has started with her overview, where she adds additional color to the press release issued earlier this morning.

30 comments:

  1. GCI down 4.77%

    ReplyDelete
  2. GCI down 6.07%

    ReplyDelete
  3. Geez, Victoria, at least Gracia sounds like she's excited about what she's reading! We all know you have to read a script, but please sound like you want to read it.

    ReplyDelete
  4. It's interesting how @Gannett (Gannett's Twitter account) is eerily silent this morning.

    ReplyDelete
  5. I find it odd how USA TODAY's revenue numbers are lumped in with "Publishing." It must be that bad.

    ReplyDelete
  6. GCI is bouncing back..now down just 3.89%.

    ReplyDelete
  7. "What no one mentions is that Martore has been forecasting 250,000 to 300,000 digital-only subs by the end of the year."

    Which is why it's now one of the least significant metrics.

    Which yields the question ... if the digital subscriptions are meeting projections, how are you going to keep digital ad rates up?

    ReplyDelete
    Replies
    1. Correction ... not meeting projections

      Delete
    2. The 250K to 300K in digital-only subscribers were never going to be a meaningful contribution to additional digital ad revenue because those numbers were simply so small to begin with.

      Corporate presumably set them low so they'd be easy to meet and, more likely, exceed. That the company has fall so far short says more about young consumer reaction to digital content.

      Delete
    3. The content sucks and no one wants to pay for it. It's really pretty simple.

      Delete
    4. I got laid off last month, but when I was still employed, no one had yet to tell us it was an insignificant metric. In fact, we were beaten up month after month for not doing better with this insignificant metric.

      Delete
  8. Correct, in Gannettland when senior management misses a goal, it suddenly becomes "one of the least significant metrics."

    Where else in the business world does this exist?

    ReplyDelete
  9. I'm surprised Wall Street isn't beating up the stock more, given the second quarterly miss on forecast revenue. Off by $200M; that's huge.

    ReplyDelete
    Replies
    1. I think you meant $20 million.

      Delete
    2. Yes; thank you: $20 million.

      Delete
  10. They must be putting weight on the better-than-expected EPS. Also possibly looking ahead to next year, when Gannett will have Olympics and political ads on a greatly expanded TV presence. But hell, that's only a guess. Who really knows anything about why Wall Street does what it does?

    ReplyDelete
    Replies
    1. This comment has been removed by a blog administrator.

      Delete
  11. Wall St. is really interested in the Belo merger. Some hope that after it's completed that Gannett might hive off the newspaper side from broadcasting, resulting in a stock pop. That's why the stock has risen lately, not because anyone sees a turnaround in newspapers.

    ReplyDelete
    Replies
    1. I agree. I think they are betting heavily on having the Belo deal approved in time to cash in on the 2014 election season. Which goes to your point, print side will gradually become irrelevant.

      Delete
    2. Taken further, print side is in wind-down mode. And it seems that USA Today is thrown into that group with its $2 cost and because it has become so tied into the papers now.
      On the other hand, local broadcast websites often are better than newspapers' sites and have quality video to boot. So if Gannett were to split, there'd be a race to the TV side.

      Delete
  12. Hahahaha - Good one.

    RT @effgannett: "We are going to follow consumers wherever they take us." Gracia M. @Gannett is always following, never leading. This is why you will fail.

    ReplyDelete
    Replies
    1. It's pretty rare for companies to lead consumers. An exception has been Apple, which developed new products (like the iPod) that consumers didn't know they wanted until they were made available.

      Delete
    2. Agree...consumers set the tone and companies generally follow. However, companies can lead other companies. That happens when they have the consumer insight based on smart understanding of their markets and the balls to follow their convictions to the market. Gannett has neither so it follows.

      Delete
    3. Arguing either side is an oversimplification. It's always chicken-and-egg. Apple did not invent demand for MP3 players, smartphones or tablets, but in each case expanded existing markets. On the other hand, a consumer survey in 1900 would have found little or no consumer demand for automobiles or $5 lattes.

      Delete
    4. I would add to the Apple analogy--all of their products were quickly duplicated by competitors at a much lower price. Witness my android tablet.

      Delete
  13. @Gannett has't had a tweet since Thursday 8:28 October 18! This tells you two things:
    1. Corp Marketing doesn't have the type of leadership it takes to formulate a strategic plan to organize and manage an effective and sustainable corporate marketing effort.
    2. Corp Marketing is perfectly fine with having the Gannett Blog and others set the agenda for what is said about the company and how the company is presented and perceived by others

    If Gannett had both 1 and 2, they would have been posting updates about what Gracia said during the analyst call and putting the spin they want on it. Now, the internet is having a field day and the stock is feeling the full brunt of it.

    This is the work of everyone's favorite CMO. A real CEO would know how to handle this. A CEO who's a couple of years away from falling into $42M does not care. Oh well - the fall will continue,

    ReplyDelete
    Replies
    1. The SEC requires quiet time for a period before release of corp quarterly earnings.

      Delete
    2. Oh, that's the reason. Ok, thanks for the insight. Understood.

      Delete
  14. Stock has bounced back and is now positive. Lousy BS conference call must have worked.

    ReplyDelete
    Replies
    1. Wallstreet is obviously only interested in the short term. They have no clue how f-up the senior level management is at Gannett. It's a what have you done lately mentality. And that's what Gannett is good at - coming up with ideas that create short term success.

      They've gotten very good at putting - that is - if/when they're able to get the ball out of the bunker and onto the green. But, a six year old can play Miniature golf pretty well. And even a three year old can actually hit a ball into a cup from 2 feet away. It doesn't take any serious intellect to do what Gannett is doing right now or to make the decisions they are making. It's all driven by ensuring the bottomline has enough meat for wallstreet and investors to chew on each quarter. That's what Gracia is good at. She's a master spreadsheeter. MS Excel is her BFF. She thinks in spreadsheets and operates the company with that mentality. Innovation or taking any risks be damned. Remember she said during the call on Monday, "I'd like to think we take a calm approach to everything." Yup, you sure do and that's why your profits are down 40% in Q3.

      Where they have problems now and will have even more problems in the future is getting the ball on the (or "a") fairway. Their swing is as bad as Charles Barkley's and that's being very generous.

      Delete

Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."

Note: Only a member of this blog may post a comment.