Media News - Thursday, July 17, 2008

Drop-off in advertising lowers Gannett’s profit by 36 percent

The Gannett Company, America’s largest newspaper publisher, reported a 36 percent decline in second-quarter earnings on Wednesday as advertising sales in its publishing business fell 14 percent. The profit, $233 million, or $1.02 a share, compared with a profit of $366 million, or $1.56 a share a year earlier. The earnings matched expectations of Wall Street analysts surveyed by Thomson Financial. Gannett, publisher of USA Today, the nation's largest newspaper, sold several newspapers in the second quarter of 2007, adding 32 cents a share to earnings. Excluding the sale, profit fell by 18 percent. Revenue fell 10 percent, to $1.72 billion from $1.91 billion, in the quarter, which ended June 29. Shares of Gannett, which is based in McLean, fell 78 cents, to $16.57. The vast majority of lost revenue in the quarter stemmed from a 14 percent decline in advertising revenue in the company's publishing business. Retail advertising fell 8 percent, and classified advertising fell 19 percent. At USA Today, advertising sales fell 17 percent in the quarter. In a conference call with analysts, Craig A. Dubow, Gannett's chief executive, said he expected an increase in revenue in the current quarter from Olympics and political advertising. (NYT)

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