Gannett 2Q Net Sinks 21% on Newspaper Weakness

By Features FOXBusiness

Hit by continued declines in print ad sales, USA Today parent Gannett (GCI) disclosed a 21% slump in second-quarter earnings on Monday.

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Yet shares of the largest U.S. newspaper company by circulation jumped by about 2% as its earnings surpassed Wall Street’s expectations.

McLean, Va.-based Gannett said it earned $119.9 million, or 51 cents a share, last quarter, compared with a profit of $151.5 million, or 62 cents a share, a year earlier. Excluding one-time items, it earned 56 cents a share, topping the Street’s view of 52 cents.

Revenue fell 2.1% to $1.31 billion, compared with consensus calls from analysts for $1.3 billion.

Gannett continues to be hit by weakness in the newspaper industry as publishing ad sales retreated 8.1% and circulation revenue dipped 0.6%.

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On the other hand, broadcasting revenue jumped 11% and digital sales rose 4.5%.Digital revenue increased 13% companywide.

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“All of Gannett's business segments remained solidly profitable in the second quarter, with Broadcasting and Digital operations delivering strong revenue growth,” CEO Gracia Martore said in a statement.

Gannett said it expects its second-half results to be bolstered by the Olympics and political spending ahead of the elections in November.

Shares of Gannett rallied 2.45% to $14.66 Monday morning, putting them on pace to extend their 2012 gain of 7%.