Television soaring while newspapers drag at Gannett


Gannett reported that broadcasting revenues increased 22.3% in Q3 and current pacings point to Q4 being up even more. Meanwhile, newspaper ad revenues were down in Q3.

“We closed the revenue gap this quarter with sequential improvement in publishing revenues as well as substantially higher broadcasting and digital revenues despite increased economic uncertainty. We achieved significantly higher profitability and operating cash flow as a result of our revenue performance and lower operating expenses driven by continued cost control efforts. Reflecting our strong footprint and ratings, our television business achieved substantial revenue growth both in its core business and in political ad spending. Digital segment revenues were propelled by strong growth at PointRoll and CareerBuilder. Our publishing segment saw continued sequential improvement in both year-over-year comparisons as well as two-year comparisons,” said CEO Craig Dubow.

Despite the strong broadcast showing, Gannett is primarily a newspaper company and its stock fell on Friday because newspaper revenues fell short of Wall Street expectations.

Newspaper revenues were down 4.8% to $969.4 million. Ad sales declined 5.1% to $646.7 million. On a constant currency basis, newspaper ad sales fell 3.2% in the US and 7.1% in the UK. Retail was down 6% and classified 2.1% in the US, while national was up 3.3%.

For broadcasting, which includes TV and the Captivate in-elevator video service, Q3 revenues gained 22.3% to $185.3 million. Broadcast operating cash flow, adjusted for special items, shot up 41.7% to $83.2 million.

TV station group revenues increased 23.7% to $179.6 million, including $16.3 million in political/issue advertising. The company said most other ad categories were also up.

“Based on current trends, we expect the percentage increase in television advertising revenues to be in the mid to high twenties for the fourth quarter of 2010 compared to the fourth quarter of 2009. However, the pace of political spending in the fourth quarter may be volatile depending on state-by-state races,” Gannett said of Q4 pacings.

Digital segment revenues rose 10.3% to $157.7 million. The segment includes results for CareerBuilder, PointRoll, ShopLocal, Planet Discover, Schedule Star and Ripple6. Including digital properties associated with the TV and newspaper segments, digital revenues were up 9.9% to $255.7 million.