Dipping Ad Sales Drive Gannett's 2Q Profits Down 5%

By Earnings FOXBusiness

Gannett (GCI) posted a 5.2% dip in second-quarter profits on Monday as the owner of USA Today grappled with more weakness in newspaper ad sales and higher restructuring costs.

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Shares of the media giant, which last month agreed to acquire TV company Belo (BLC) for $1.5 billion, retreated about 2% on the results.

Gannett said it earned $113.6 million, or 48 cents a share, last quarter, compared with a profit of $119.9 million, or 51 cents a share, a year earlier.

Excluding one-time items, it earned 58 cents a share, matching the Street’s view.

Revenue slipped 0.3% to $1.3 billion, compared with estimates from analysts for $1.33 billion.

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Gannett said its publishing ad sales declined 5.3% to $562.5 million, compared with estimates for $568 million. Publishing circulation revenue jumped 6% to $279.7 million, while broadcasting revenue rose 3% to $212 million.

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The company said its broadcasting expenses increased 2.8% to $113.9 million amid higher costs tied to strategic initiatives. Digital expenses jumped 4.4% to $151.2 million.

"Our long-term strategic plan -- with a focus on both investment and execution -- continues to position us for success well into the future,” Gannett CEO Gracia Martore said in a statement.

Shares of McLean, Va.-based Gannett fell 2.20% to $25.78 Monday morning, trimming their impressive 2013 rally to 43%.