Gannett second quarter earnings report shows growth in digital revenue, though print ad revenue declines 5.3%
Gannett, the publisher of USA Today and other newspapers and broadcasting outlets, this morning reported its second quarter earnings. Total revenue fell only slightly, with publishing ad revenue being the culprit. Operating income fell 6.3 percent compared to the same quarter a year ago.
Publishing ad revenue at Gannett fell a further 5.3 percent, to $562.5 million from $594.3 million in the same quarter. Circulation revenue, though, grew 6 percent to $279.7 million from $263.9 million. The digital segment, which includes CareerBuilder, also grew – though less than 3 percent (company wide, digital revenue grew 20 percent to reach 30 percent of total revenue).
Gannett is clearly counting on broadcast to be the future. Earlier this month the company confirmed that it would be acquiring all outstanding shares of Below Corp for $13.75 per share in cash, approximately $1.5 billion, plus the assumption of $715 million in existing debt. (Belo Corp. is the company spun off of A.H. Belo and does not include the Dallas Morning News.)
Broadcast revenue grew 3.2 percent in the quarter.
“Gannett’s pending acquisition of Belo, and finding new ways to get content and offerings to the right user at the right time, are steps in our long-term strategy. We are accelerating our transformation into the ‘New Gannett’ every day,” Gracia Martore, president and chief executive officer, said in the earnings announcement.
Expenses grew slightly in the quarter, and when combined with the small decline in overall revenue, contributed to operating income falling 6.3 percent to $202.9 million versus $216.5 million a year ago.
“We are very pleased to report solid revenue growth in our Broadcasting and Digital segments as well as our fourth consecutive quarter of year-over-year circulation revenue growth overall in our Publishing segment. Earnings per share were higher in the quarter as our strategic initiatives, particularly our content subscription model and digital offerings, continued to gain momentum and positively impact our results,” Martore said.