Friday, January 28, 2011

Earnings | What to watch for in Monday's report

Gannett reports fourth-quarter and full-year 2010 financial results before stock markets open Monday morning. As always, some of the most interesting details also will emerge in the question-and-answer session during the conference call with Wall Street media analysts scheduled for 10 a.m. ET.

Beyond the usual suspects -- revenue and net income trends -- here's what I'll be watching for:

Severance expenses. You'll recall Chief Operating Officer Gracia Martore told analysts during the Oct. 22 call that she wasn't expecting significant severance costs during the final three months of the year. Only two weeks later, of course, the U.S. newspapers started a series of job reductions that ultimately claimed an estimated 253 jobs at 63 papers, many through layoffs. Several papers also announced wage cuts. (Corporate's transcript of the third-quarter call.)

Paywalls. Gannett now has results from six months of experiments with paywalls it erected at newspapers in Tallahassee, Fla.; Greenville, S.C., and St. George, Utah. So far, the company has been vague about the impact on revenue and traffic. In the last update, during the UBS media conference in December, CEO Craig Dubow said only:

"We now have a couple of months of data as a result of these tests and, while it is still early, we are seeing some very interesting results and important takeaways."

Consolidations. The current status of the five Design Studios to build pages for nearly all the 81 U.S. community dailies; this project has now entered its third quarter since being announced. The effort follows the establishment of two Gannett Production Centers, the hubs at Indianapolis and Des Moines that were to be fully up and running by early 2011 to design and build advertising artwork.

Analyst forecasts
Gannett has already hinted that advertising revenue continues to fall; that was a reason newspaper division chief Bob Dickey cited Jan. 4 in announcing another round of mandatory one-week furloughs during the current quarter.

For the fourth quarter, analysts on average are expecting GCI to report net income of 80 cents a share, up from 72 cents in the last three months of 2009. They're forecasting $1.47 billion in revenue vs. $1.49 billion the year before.

GCI stock rose 19.9% during the fourth quarter, closing on Dec. 31 at $15.09 vs. $12.59 on Oct. 1. During the same period, the S&P 500 index, a broad measure of overall market activity, rose a much smaller 9.8%. (Historical GCI prices during the quarter.)

Today, shares recently traded for $14.87, down 1%.

Related: Corporate's statement on the third-quarter results. Plus: the third quarter 10-Q filing with the U.S. Securities and Exchange Commission


  1. My summation of Q4 and Period 1 201l: Ugly and uglier.

  2. Sorry, haven't been watching. Are the 5 Design Studios only designing ads for all 81 papers or are they also doing editorial pages?

  3. The Design Studios and the Gannett Production Centers are two different things.

    The five studios will design and produce newspaper pages. They are based at Asbury Park, N.J.; Des Moines; Louisville, Ky.; Nashville, Tenn., and Phoenix.

    The two GPCs design and produce advertising artwork from two locations: Des Moines and Indianapolis.

  4. I really think that organizations such as Gannett need to figure out the online space. It is probably the only place they are going to get increased advertising revenues, if they learn to create good content and monetize it properly.

  5. Analysts should ask why The Arizona Republic has been exempted from furloughs, even though other newspapers imposed them. Republic staffers were quietly told that they were exempt, without a memo going out, in hopes that it wouldn't be reported on this blog and elsewhere.

  6. Analysts could care less about what happens at any particular operating unit. What they are concerned with is the state of the business, operating profit, expense management and upcoming opportunities. What happens at TAR or USAT or Clipper is of little interest. Surely they care nothing about furloughs at a single unit.

  7. Hey, I'm in Palm Springs. Can you ask Dickey if he can speak to one of his cronies to get me on one of the pricey golf courses. Also, a room where he stays for "business" would suffice. And of course, complimentary dining at a swanky steakhouse.


    Gannett manager-in-the-making

  8. Nice try 9:07 PM but given the revenues and profits Gannett’s larger properties are supposed to generate – and the rippling problems they create if they don’t – any material change is of interest. And since Gannett papers all march to the same flag, it very well may be a good area to probe. If they’re exempt does that mean they’re market is recovering or is there some other reason of interest?

  9. I work at one of the paywall sites and I want Dubow to stop dicking us around. Either admit it's not working and scrap it, or sell us to someone who actually cares about our newspaper. It's not about print vs. online. I think maybe half of our print subscribers have activated their online subscription. Why is that? I'd expect a much higher percentage if digital is the future and everyone expects to get their news online. Truth is, complaints about our paper are the same complaints about every Gannett paper: It's thinner, more expensive, with less local news than ever. People know crap when they see it, whether it's on paper or in pixels.

    I know we're a throwaway site to Gannett. We're part of the test because our failure will have the least negative impact on the company as a whole. But real lives are being affected by this "experiment." At the very least, we should've been exempt from furloughs.

  10. Steamed Stockholder1/30/2011 11:16 AM

    Interim CEO hit it on the nose. I'm sick of seeing the brass blame "content providers" and have them muck around with the news product, which usually winds up diluting it, whether it's digital or print. They need to come up with a plan to make money in the digital, if they can't, the shareholders and institutional investors should demand they be replaced with someone who can. This company is starting to circle the drain and soon the stock will only have value as a substitute for toilet paper.

  11. Steamed Stockholder, I can definitely see the frustration. There are many, many companies making money from Digital content. Why should this organization be any different?


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