November 29, 2023

Gannett Newspaper Revenue Falls 6.5% in Weak Ad Climate

In the latest sign that the industry has yet to recover from an advertising slump, quarterly profit and revenue at the newspaper company Gannett fell.

Gannett, the largest newspaper chain in the United States, said Monday that total revenue was down 2.2 percent to $1.33 billion in the second quarter. The figure was in line with the average analyst forecast, according to Thomson Reuters.

Gannett, which publishes USA Today and 81 other newspapers, said ad revenue at its newspapers dropped 6.5 percent to $646.9 million as retail, automotive and national advertisers pulled back on their spending.

Advertising revenue this quarter is “getting off to the same start” as the second quarter, Gracia Martore, president and chief operating officer of Gannett, said in a conference call.

The company also doubled its quarterly dividend and reinstated its $1 billion share buyback.

Gannett posted a profit of $151.5 million, or 62 cents a share, compared with $195.5 million, or 73 cents a share a year earlier.

Excluding costs for facility closings and job cuts and a net tax benefit, Gannett posted a profit of 58 cents a share, beating analysts’ forecast by a penny.

Gannett cut 2 percent of its work force, or 700 employees, at its American newspaper division in June, citing a sputtering economic recovery weighing down national and local advertising.

Derek Maupin, research analyst at Hodges Capital management, which holds shares in Gannett, is slightly concerned about Gannett’s print advertising but believe shares are still undervalued at its current price. He cited increases in other segments like broadcasting revenue.

At the company’s broadcast division, total revenue inched up to $184.4 million compared with $184 million in the same quarter a year ago.

TV revenue was up slightly to $177.7 million and the company forecast the percentage decline in the third quarter to be in the midsingle digits.

Digital advertising rose almost 13 percent to $173.4 million, the company said.

The company doubled its dividend to 8 cents a share. It expects to repurchase $100 million in shares over the next 12 months, as part of the $1 billion share buyback originally approved five years ago.

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