Largest US publisher Gannett's quarterly profit down 60 per cent

17 April 2009

Media house Gannett Co Inc, the largest newspaper publisher in the US, posted a 60 per cent drop in quarterly profit because of lower advertising revenue. Nonetheless, cost cuts helped it to do better than the market expected.

Gannett, which publishes 80 newspapers across the US, including the country's third largest daily USA Today, reported a 34-per cent drop in publishing ad revenue. US publishing ad revenue fell 28 per cent.

Those declines are some of the steepest yet for the US newspaper industry as the recession prompts advertisers to slash their budgets. Other publishers that will report in the coming weeks include Media General Inc, McClatchy Co and The New York Times Co.

Gannett reported net income of $77.7 million, or 34 cents a share, down from $191.8 million, or 84 cents a share, a year ago. Revenue fell almost 18 per cent to $1.38 billion. Excluding gains relating to a union pension plan and a charge for layoffs and consolidation costs, Gannett's profit was 25 cents a share, beating average analyst estimates by a penny according to Reuters Estimates.

Gannett cut expenses 10 per cent to $1.2 billion. It has been working on a number of ways to modernise its news-gathering and adapt to the Internet. In the meantime it has been resorting to lay-offs and furloughs for employees. Gannett also is experimenting in other ways, including cutting the number of days it home-delivers print editions of the Detroit Free Press.

Chairman, President and CEO Craig Dubow, during a conference call with Wall Street analysts on Thursday, declined to say how much of the company's advertising decline is permanent and how much is because of the financial crisis.