Archive for the ‘Monthly statistics’ Category

In new disclosure, digital less than 5% of total sales

October 24, 2008

Gannett began breaking out its digital revenue with today’s third-quarter earnings report — and the results are eye-opening.

Revenue from jobs site CareerBuilder, ad services division PointRoll, and other digital subsidiaries totaled $77.6 million — 4.7% of the $1.64 billion in operating revenue during the period. That’s way up from $17.2 million a year ago, although it remains just a tiny fraction of Gannett’s overall operations — underlining the challenge ahead, given digital’s importance in the future.

In a fresh comment, a reader says: “It’s only sort of correct that digital division revenue is 4.7% — Q3 only included 1 month of CareerBuilder revenue. By Q4 the division will be 11% or more of GCI revenue. Chief Financial Officer Gracia Martore said:


‘Revenue in the digital segment was about $78 million this quarter …. On a pro forma basis, assuming we owned CareerBuilder and Shop Local for the entire third quarter in 2008, digital revenue would have been in the range of $175 million to $185 million …'”

Bye-bye, monthly stats
The digital breakout came in lieu of the familiar monthly statistical report, which Gannett said today it had discontinued, citing big fluctuations in digital revenue. Yet, media stock analysts told Corporate in an earnings teleconference that they still wanted the monthly report. “You guys don’t stop printing a newspaper when the news is really bad,” said Craig Huber of Barclays Capital. “Why is this being stopped now? I mean, you guys have been doing this for well over 15 years.”

Chief Financial Officer Gracia Martore rushed to correct that impression, however, saying the report wasn’t significant because GCI isn’t run on a month-to-month basis. Still, sensing dissatisfaction on the conference call, she suggested the report could return. “At a point, we may re-institute it,” she said. (Conference transcript.)

It sure seems like an odd move. The trend among publicly traded companies like Gannett has been toward more disclosure, more “transparency.” Discontinuing the monthly report now, when there’s so much uncertainty, only sows suspicions about ulterior motives. “This is like the very worst time you could possibly pull it,” Huber said.

Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

Breaking: Gannett’s third-quarter profits dive 32%; ad revenue slide worsens; dividend remains safe

October 24, 2008

Gannett said third-quarter earnings plunged 32% on a worsening decline in newspaper advertising sales, spurring more job cuts by year’s end — and encouraging the once-unthinkable: slashing the company’s unusually generous dividend.

The results were largely in line with Wall Street’s expectations. But CEO Craig Dubow and other top executives failed to rally influential Wall Street stock analysts during an occasionally contentious teleconference on the quarterly results.

Chief Financial Officer Gracia Martore (left) ruled out an immediate dividend cut. But she said management and the board of directors continue to study how best to allocate capital. She said directors are scheduled to meet next week, although she didn’t disclose their agenda. “We’ll continue to discuss it with the board,” Martore said.

She also indicated severance expenses would rise in the current quarter — reflecting Dubow’s warning last week that more layoffs are in the works. Martore didn’t offer any details, however, including any target for job cuts, or a timetable.

Some analysts were unhappy with Gannett’s disclosure today that it had stopped reporting revenue through the familiar monthly statistical reports. They also questioned GCI’s failure to more aggressively buy back shares, now down 78% from a year ago. (Conference transcript.)

Gannett Blog reader reaction came fast. “I love it,” one said. “A newspaper-media company withholding news. In the conference call, they disclosed they will no longer publish the monthly ad revenue figures, but will only put them out quarterly. Stock analysts didn’t like this . . . and Corporate had some lame response about monthly not fully counting digital revenues, etc. The other ominous thing I got out of the conference call was that Corporate has no interest at buying back GCI stock, even at this low level.”

Ad revenue collapse accelerates
For the quarter, Gannett reported net income of $158 million, or 69 cents a share, on revenue of $1.64 billion — down from $234 million, or $1.01 per share, a year before.

Revenue exceeded the $1.61 billion forecast by analysts, but was nonetheless 9% lower than a year ago. Excluding severance costs for a big newspaper division layoff in August, Gannett would have earned 76 cents a share, a penny above what analysts expected.

Newspaper ad revenue plunged about 18% from last year’s third quarter — the steepest year-over-year decline since revenue began falling early last year. The revised newspaper division ad revenue trend:

Flagship USA Today‘s ad sales fell 7.1% in the third quarter vs. a year ago, the company said. Paid ad pages totaled 713 vs. 803 last year.

Stock closes down
Gannett
shares closed at $9.47, down about 2%, after recovering from an earlier low of $8.61. Still, GCI’s dividend yield has soared to nearly 17%, spurring speculation that the company would move today to cut the payout — a step considered by industry rivals. In its third-quarter earnings report yesterday, the New York Times Co. said it was considering a reduction in its dividend.

Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

[Image: today’s USAT front page, Newseum]

Reader: Our September data was ‘extremely bad’

October 10, 2008

The reader says their worksite has told employees about revenue and other financial data for September — period nine, or “P9,” in GCI lingo.

“We got our P9 numbers recently, and they were bad. Extremely bad,” Anonymous@10:14 a.m. said this morning, without revealing their location. “There were a lot of gasps in the room when some of the numbers were announced. Also, while the numbers have always been available to us for the asking, this time it was different. They seemed to make it a point to let us know this time around what the numbers were. I’ve never seen that kind of urgency before. It almost feels like we’re being set up for worse news.”

Indeed, last month’s revenue figures won’t reflect the consumer confidence carnage this month, amid the mammoth Wall Street selloff. Since Oct. 1 alone, for example, Gannett’s shares have fallen 26%, Google Finance says.

Companywide revenue figures for September will appear in the next monthly statistical report, which will likely be disclosed around Oct. 24, when Gannett is set to report third-quarter earnings.

Have any other readers here gotten their September figures, too? Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

Icebergs ahead, we sail into uncharted waters

October 3, 2008

[Titanic? Even the band has quit playing at McLean, Va.]

Gannett enters the year’s final quarter, facing more threats on more fronts than ever before in its 102-year history. With earnings threatened anew in the banking crisis, and its shares down sharply again today, what options lay ahead for the nation’s top newspaper publisher — beyond more immediate layoffs?

The economy is in danger of falling into a deep recession. Gannett’s costs for credit, fuel, newsprint and other essentials are rising. Total operating revenues have fallen every month this year from last year — down 9.5% in August, the most recent data show (chart, inset). August’s results would have been worse but for a one-time surge in Olympics TV advertising.

The hemorrhaging is greatest in the newspaper division: Publishing ad revenue dived nearly 17% from August 2007, the biggest monthly decline all year — bigger, even, than the 14% plunge in the quarter right after 9/11. And that was before Wall Street melted down in a wave of selling fueled by the banking crisis — sending Gannett’s stock down 31% since the end of the second quarter. Shares plunged 6.8% today alone, closing at $15.18.

To be sure, Gannett hasn’t been sitting still. The company gained majority control of huge jobs site CareerBuilder. But other digital initiatives like HighSchoolSports.net aren’t doing so well. And a round of 1,000 newspaper job cuts in August and a big management reorganization last month failed to impress investors. What’s more, those reductions accounted for less than 3% of the 46,000-employee workforce. Other publishers have slashed far deeper: Miami Herald owner McClatchy Co. has exacted two 10% cuts since June alone. In Washington, the Spokesman-Review this week said it would cut its newsroom staff 25%, spurring the editor’s resignation in protest.

Gannett can’t continue losing revenue at a double-digit clip without answering to Wall Street — perhaps at the next (still-unscheduled) third-quarter earnings release within the next four weeks. With labor among the few big costs Corporate can control, and layoffs one of the few remaining tools at its disposal, the fourth quarter is already looking grim. As a Gannett Blog reader wondered yesterday: “Where’re we going with all this?”

Answer: Into uncharted waters, without so much as a band to play on: GCI has canceled this year’s annual Corporate-USA Today holiday party at McLean, Va., in favor of a $25,000 donation to the employee disaster assistance fund, readers here say. (Can anyone confirm — and add details?)

Revenue, earnings outlook
Wall Street already has diminished expectations for the third quarter, and for all of 2008. Analysts forecast third-quarter revenue of $1.63 billion, down 10.3% from 2007, and earnings of 78 cents a share, down a whopping 23% from $1.01 in 2007. For all of 2008, revenue is forecast to be $6.81 billion, down 8.5% from 2007. Earnings are expected to average $3.58 a share, down 21% from 2007.

In a fresh comment, below, Anonymous@10:23 a.m. says: “All of this has to make one wonder how Gannett can sustain a dividend payment that, as of Oct. 2, constitutes a 9.5% yield. And when that dividend is cut, watch out for more drops in the stock price.”

Earlier: Why you should consider taking a buyout

Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

August revenue improves on broadcasting surge

September 15, 2008

[August revenue results compared to prior months]

Updated at 1:51 p.m. ET. Total operating revenues fell 9.5% last month from August 2007, as the broadcasting division delivered a big increase from Olympics and political campaign advertising, Gannett said today. The results were better than July’s 12.3% decline. USA Today‘s advertising revenue last month weakened anew, however.

Overall revenues totaled $499.8 million, down from $552.5 million in August 2007, the company’s monthly statistical report showed. Revenue in the broadcasting division, which includes 23 TV stations, surged 20.7% from a year ago. “The growth was driven by almost $24 million in revenue related to the Olympics on our NBC affiliates and a $6.9 million increase in politically related ad demand,” the report said.

At flagship USA Today, advertising revenue fell 13.5% on paid ad pages of 208 vs. 236 in August 2007, the report said. Last month’s slide compared to a 5.5% decline in July.

The newspaper division, which comprises 84 community dailies, continued to weaken on more dismal classified advertising losses, especially in real estate. Division revenue fell 16.8% from August 2007. (The division does not include USAT.) Classified revenues were 28% lower. Within that category:

  • Real estate: down 40.9%
  • Employment: down 33.6%
  • Automotive: down 21.1%

Investor reaction was hard to gauge: GCI shares were recently trading at $16.89, down 3.7%, Google Finance says. But stocks overall were getting clobbered amid a near-meltdown in finance-related shares.

Please post your reactions in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

Phoenix: 27 retire in news; what is paper’s total?

August 31, 2008

The Arizona Republic delayed any layoffs during the recent round of 1,000 Gannett newspaper job cuts, because the big Phoenix newspaper still had buyout offers on the table. Now, in a memo, top Republic editor Randy Lovely (leftsays 27 newsroom employees are leaving — presumably, all in buyouts or traditional retirements. “These individuals have worked tirelessly to provide our readers with a top-notch daily news report,” he said. “I am enormously grateful for their efforts.”

What about other departments at the Republic, which Corporate says employs as many as 2,700? The paper’s deteriorating financial situation suggests it was due for big overall job cuts. The Republic is likely the biggest individual workplace within Gannett, which employs about 46,000. Yet, the Phoenix paper has been hit hard over the past 12 months by real estate-related advertising losses. Indeed, Arizona is one of four states (the others are California, Nevada and Florida) where a housing bust has contributed substantially to Gannett’s monthly revenue declines, and that big second-quarter earnings dive.

Some 35 Republic pressroom employees were laid off earlier this month, after being denied buyouts extended to the newsroom in July. Combined with the 27 just-announced newsroom losses, that totals 62 jobs paper-wide. Is that the Republic‘s final count?

Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

Earlier: Paper-by-paper layoffs

[Image: today’s Republic front page, Newseum]

Breaking: Gannett says July’s revenue fell 12.3%; no change in downward trend; USAT improves

August 22, 2008

[Downer: July’s GCI revenue compared to earlier periods]

Updated at 5:49 p.m. ET. Gannett just reported that last month’s operating revenues tumbled 12.3% from July 2007, as classified advertising losses accelerated. The revenue results were slightly worse than June’s 12.1% drop. Yet, they’re in line with CEO Craig Dubow‘s warning in the second-quarter earnings report.
Flagship USA Today bounced back: Its advertising revenue fell just 5.5% from July 2007, a big improvement over this June’s year-over-year 27% plunge.

Gannett’s classified advertising trend — especially real estate — only got worse last month, the new monthly statistical report shows:

  • Overall classified: down 25.2%. (June’s was down 21.6%.)
  • Real estate: down 38%. (June’s was down 34%.)
Investor reaction? Z-z-z-z-z-z. Gannett shares closed at $17.67, up 12 cents, amid a broad stock market rally, Google Finance says.

Gannett Blog Reax
From the comments section, below:

  • “Don’t look for improvement in August. Expected Olympics ads have not showed up, and I hear contracts for back-to-school have been miserable.”
  • “Let’s be clear about these results. Revenues are down, and have been declining, but Gannett is NOT losing money. All, or nearly all, properties are profitable. . . . The profit margins of at least three papers — Palm Springs, Guam and Green Bay — continue to be near, at or above 40%.”
Please post your reactions in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

Results weak, GCI revamping Information Centers

July 31, 2008

Nearly two years after launching a radical change in how its newsrooms distribute information, new top Gannett executives are revamping the concept amid weak Web traffic growth, an alarming decline in revenues, and a plunging stock price.

The Information Center concept emphasized digital delivery over print, and was a cornerstone of CEO Craig Dubow‘s turnaround plan for the 84 U.S. community newspapers. But based on GCI’s recent financial results, the closely watched experiment is failing its main mission: shoring up Web traffic and online ad sales.

Gannett has disclosed little about the scale or timetable for any changes to the model, which is still being applied to the 23-station TV division and the 17 daily papers in the U.K. Yet, details have started emerging in newsletters to employees, regulatory filings, internal documents, and in recent Gannett Blog comments. “Info Center 2.0,” as one reader calls it, targets younger baby boomer demographics — “which if you haven’t been clued into yet, you will soon.”

Listening to ‘fatbottoms drone’
Another reader wrote about an Information Center meeting Tuesday attended by the “high muckety-mucks” (though not Chief Digital Officer Chris Saridakis). “We’re listening to the fatbottoms drone on endlessly,” the reader wrote, apparently while still in the meeting. “Good thing we wasted a good portion of the day looking at screenshots we’ve seen eight times before, though. Very informative!”

Trying to tamp down such unrest, the company told employees late last month that any newsroom organizational changes wouldn’t be dramatic. “These steps are more evolutionary than revolutionary,” News Department chief Phil Currie (left) said in the June 26 edition of News Watch newsletter.

Currie’s department played a big role in developing the Information Center idea, which directly affected about 5,000 newsroom employees — or 11% of the workforce. But as one of its chief ambassadors, Currie is a font of disinformation — since he long ago jettisoned journalism in favor of Marketing Speak. (See Pop Quiz, bottom of post.) For example, word for word from his News Watch piece, here’s how Currie described the “next key steps” in whatever gets done with the newsrooms:

  • Identifying and understanding vital audiences at locations across the company and delivering effective content to satisfy readers, digital users and advertisers.
  • Engaging our audiences in ways that better connect our digital and print products with them — and the audiences with us.
  • Providing our audiences with more and better multi-platform public service journalism that will help distinguish our work from that of other media. Our audiences want effective watchdog work particularly in this time of turmoil at all levels of government and life. We will deliver it.

Huh? The first two are total gobbledygook. The third apparently refers to the internal findings of the Newspaper Division Print Task Force, which emphasized more hard news and watchdog journalism for the print newspapers, and their core baby boomer audience.

New management, weak financials
The Information Center strategy, and that task force report, were hatched under now-retired newspaper division president Sue Clark-Johnson. Her successor, Bob Dickey, is already putting his own stamp on the division, dramatically reshaping top leadership, and inevitably raising questions about the Information Center’s future.

Dickey, 50 (left), has no time to waste, given Gannett’s deteriorating position. Second-quarter net income plunged 36% from a year ago, to $233 million, on an unexpectedly bigger drop in ad revenues. That was a far worse performance than the second quarter of 2006, just before the Information Center was introduced. Net income that quarter fell just 8.3% from the year before, to $310.5 million.

What’s more, Web traffic growth has been anemic, and penetration has been flat, GCI’s monthly statistical summaries show. Last month, Gannett recorded a combined 23,076,000 unique visitors on its U.S. websites, including USA Today‘s. That was 14.1% of the Internet audience. In June 2006, just before the Information Center was rolled out, GCI had 22,238,000 such visitors — 14.2% of all.

Meanwhile, online ad revenue growth rates at the domestic community dailies are apparently now so dismal, Gannett no longer publishes them. No wonder investors are losing patience: The company’s stock is now trading around $18 a share — down more than 60% from the second quarter of 2006.

Earlier: At Gannett headquarters, the band plays on

Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

Pop Quiz: Phil Currie or oil industry flack?
Someone wrote the following: “In troubling times in our industry, we are not about to retreat. We continue to march forward, counting on getting closer to the people who count on us. And we are saying, ‘Yes, [                ] does matter, and it remains a must.”

(No-duh answer, here.)

[Image: this morning’s Florida Today, Newseum; Today was one of the original 11 test sites for the Information Center]

Breaking: Q2 profits tumble, shares plunge anew; Dubow cites economy’s ‘dramatic’ impact on GCI

July 16, 2008

Updated at 5:18 p.m. ET. In a much-anticipated report, Gannett just disclosed that earnings dived 36% from a year ago, on a worse-than-expected drop in revenue. Chairman and CEO Craig Dubow said the near-term outlook is grim. Flagship USA Today‘s sales tanked dramatically. Shares swooned to new 20-year lows.

The beleaguered company’s profits sank to $232.7 million, or $1.02 a share, from $365.7 million, or $1.56 a share, a year ago. Revenue totaled $1.72 billion, down 10% from last year. Wall Street analysts had expected $1.02 a share in profits, but $1.74 billion in revenue, Yahoo Finance says.

Disappointed investors dumped Gannett shares. They traded as low as $14.70, down more than 15%, before recovering late in the morning. GCI closed at $16.57, down 4.5%, on extraordinary volume: 16.5 million shares traded vs. the 4.8 million average.

In a just-concluded conference call with stock analysts, Dubow said sharp revenue declines in June appeared to be continuing this month. “We’re seeing probably more of the same,” he said. And Chief Financial Officer Gracia “The Knife” Martore, who dominated the discussion, said Gannett planned to use its cash horde to look for more digital deals, such as the recent buyout of ShopLocal.com, and to further pay down debt.

“The weakening economy had a dramatic impact on our results,” Dubow said in the earnings report. He cited “pressure on advertising demand” for the newspaper division, particularly classified advertising in “real estate-centric markets in the U.S. and in the UK.”

Sharp revenue decline in June
In a separate monthly statistical report, Gannett said June revenue fell 12.1% from a year ago, amid further erosion in USA Today‘s results. The top-circulating paper’s revenue fell 27% from June 2007 on 236 paid ad pages vs. 329 last year. The monthly tallies for the company and for USA Today were the worst so far this year. USAT‘s results follow a big shake-up last month in the daily’s advertising sales leadership.

Amid growing pressure from big investors, Gannett this morning did not disclose any big shifts in its strategy — such as a spinoff of the company’s TV division or its digital properties, steps taken by other newspaper publishers to satisfy increasingly restive investors. Boxed in by a failing strategic plan, and a worsening U.S. economy, Dubow’s options now look increasingly limited.

With about 46,000 employees, Gannett is the nation’s top newspaper publisher, with USA Today and 84 community dailies in the U.S., and 17 in the United Kingdom. It also owns 23 TV stations, and scores of other businesses.

Related: Gannett joins list of newspaper victims

Earlier: What big investors expect this morning

Your reactions, in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

[Image: this morning’s USA Today, Newseum]

Gannett stock closes at new low: down 3%

June 19, 2008

Updated at 4:45 p.m. ET: Shares closed at a new low, $23.67 — down more than 3%.

Earlier: As I leave Paris and return to the Mediterranean island of Ibiza, I see that GCI shares have traded as low as $23.72 today on heavy volume, breaching yesterday’s lows on news of May’s puny revenue report.