Tuesday, February 04, 2014

Q4 earnings fell 12% on steep newspaper ad drop

Gannett said this morning that fourth-quarter profit fell 12% as both print and broadcast revenue declined on tough comparisons with the year-earlier quarter, when results were boosted by TV political advertising from the national elections as well as an extra week during Q4 2012.

Company-wide revenue fell 9.9% to $1.37 billion. The major culprit once more: newspaper advertising in the company's largest division, which fell 10.3% to $590 million. That was the biggest quarterly ad revenue decline since the fourth quarter of 2009, when it plunged 17.9% to $791 million as the economy was leaving the Great Recession, according to regulatory documents.

Excluding the extra week in Q4 2012, newspaper ad revenues fell just 5.9%, Corporate said in today's news release announcing the results.

GCI's stock recently traded for $26.54 a share, nearly flat.

Related: a replay of the 10 a.m. conference call with Wall Street analysts; I'll post a transcript when it becomes available later today.

17 comments:

  1. not much of a surprise when they fired the seasoned print sales reps and replaced them with online reps

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    1. Reporting staff too

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    1. Revenue is down over 200 million comparing fourth quarter 2009 with fourth quarter 2013? How is this possible? I hope someone will double-check these numbers. I think a mistake has been made. At least I hope so.

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    2. That's newspaper advertising revenue that's down $200 million from Q4 2009. That's a decline of 25%.

      Overall revenue is down just $117 million from Q4 2009, or 8%, because off offsetting gains in the Digital Segment and in Broadcasting.

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    3. Thanks for clarifying Jim. Still, what a brutal decline. I think broadcasting is still strong for the immediate future but digital scares me as much as print. Many digital ads exist only because advertisers purchased them with a print buy-in package. If print ads disappear I'm betting many digital ads will as well.

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    4. Print revenue in Q4 2013 is down 200 million versus Q4 2009. Yet people still complain about Craig Dubow?

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  3. When are these idiots going to sell off print so someone who knows and cares can help it reach its potential?

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    1. The suggestion, oft-repeated here, that there is a viable market for print franchises is, to put it in the vernacular, nuts.

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    2. The problem with the sale of one of its print franchises in a tough market is the lower valuation it will bring to all remaining print assets. It's the equivalent of a neighborhood full of million dollar homes having one sell for half a million.

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  4. The management is into full-fledged "abandon print" mode. They would prefer to sell a $35 online ad over a $1,000 print ad even though the print ad is still their bread and butter. (Management gets pats on the back for selling online and no recognition for print anymore) The problem is most of their online "solutions" aren't wanted by the customer. Eventually they'll abandon print enough that the new online revenue won't be able to support the paper and some will close. That's my prediction at least.

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    1. This started with the advent of Gannett Local. Publishers were hot to pump up their digital numbers and show success and the sales depts were told to make it happen at whatever cost. However, by the middle of last year, the losses in print started to cause panic and, in typical Gannett fashion, print became the flavor of the day again. Except, they couldn't recoup what was already lost. By Q4, nothing could be done to stop the hemorrhage. Hence, the decline of 25% in print revenues. Only going to get worse, folks. Buckle up.

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  5. The "abandon print" comment by 2:27 p.m. brings to mind Gannett's hastening of the death of afternoon dailies. Sure they were on their way out because of changing reader habits and lifestyles, but Gannett (and others) killed some PMs while they were still popular and allegedly profitable (eg Reno Evening Gazette). It also converted some to AM (eg Stockton and Olympia, among the papers it sold).

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  6. Folks, don't be fooled. Gannett IS going out of business. It is presently winding down operations in the most lucrative way possible. They know the numbers will continue to get worse; that's part of the plan. Once you accept this reality everything will become clearer about your futures. No point in sitting on your hands while wasting your time being mistreated by a company that doesn't value you. It's time to plot your own future and get going on those job interviews.

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  7. The problem with trying to sell off some of the newspapers is that most Gannett papers don’t have an ad production dept, don’t print or deliver their own product, just to name a few.

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