Cost cutting and a not-as-bad advertising climate in the first quarter made Gannett Co. look good in its 1Q earnings report Friday, and the tide lifted not all but some boats.
“Gannett did not issue formal earnings guidance for the current quarter or the rest of the year, and CEO Craig Dubow declined to give specifics on how ad revenue is shaping up in April,” The Associated Press said. “But he told analysts on a conference call that the year was ‘off to a great start.’ He added: ‘The momentum that we had at the end of the year continued through the first quarter.’
“Gannett was the first major publisher to report earnings for the January-March period and could offer a preview of what will come next week from McClatchy Co., Lee Enterprises Inc. and The New York Times Co.”
After surging to a new 52-week high of $19.68 in early trading, Gannett shares retreated to $18.04 Friday afternoon, down $0.10 on the day. McClatchy rose $0.42 to $6.46, and Lee shares jumped $0.31 to $4.35. The New York Times was down $0.36 to $12.35.
Gannett, which owns USA Today and more than 80 other daily newspapers along with TV stations, said its net income jumped 51 percent despite a 4 percent decline in revenue. Last year it cut 1,400 jobs, or about 3 percent of its work force.
As for McClatchy, which reports April 22, “JP Morgan forecasts that ads will be off by 8.4 percent as circulation continues to grow,” says PaidContent.org. “While the circulation gains might not offset negativity on the ad front, cost-cuts should help margins jump to 25 percent from 1Q ’09’s 12 percent. Ebitda should rise 91 percent to $83 million.
“In general, McClatchy’s heavy presence in Florida and California means that its fortunes are directly tied to the economic winds in those two troubled states. Ultimately, that will add to the general industry-wide woes affecting the publisher.”