Gannett's Profits Crumpled

Gannett's (GCI) fourth-quarter profit tumbled 31%, hit by impairment charges and a plunge in advertising revenue as the newspaper industry continues to deal with widespread turbulence.

The McLean, Va., media giant said Friday that its net income dropped to $245.3 million, or $1.06 a share, from $353.5 million, or $1.51 a share, a year earlier.

The results included a charge of $50.8 million, or 22 cents a share, to write down the value of certain titles. Excluding this charge, earnings would have been $1.28 a share, a penny better than Thomson Financial's average analyst estimate.

Revenue dropped 11.9% to $1.90 billion from $2.15 billion the prior year, shy of Wall Street's target of $1.98 billion.

The declines came against year-earlier results that were boosted by an extra week and a bevy of political advertising for the 2006 elections. Nonetheless, results were weak as the newspaper industry grapples with an ever-expanding shift to the Internet and a tough overall macroeconomic environment for advertisers.

Gannett's newspaper advertising dropped 12% to $1.25 billion, hurt by a double-digit decline in national and classified advertising. Excluding the effect of an extra week in the year-earlier period, newspaper ad revenue would have declined 7.7%.

At USA Today -- the nation's largest newspaper by circulation -- advertising revenue plunged 16.7% from a year earlier. On a comparable-week basis, revenue would have been down 12.7%.

Gannett's overall circulation revenue slipped 7.2% to $313.2 million.

Broadcasting revenue slid 21.7% to $212 million, a decline Gannett attributed to the absence of political ads that lifted revenue in the 2006 period.

Most other publishers reporting fourth-quarter earnings this week have posted lackluster results. New York Times'(NYT) profit was sharply improved from a year earlier, when a writedown hit results, but revenue slid 7% for the quarter. Media General(MEG) posted a 70% profit plunge on a writedown, while revenue dropped 17%.

Journal Register(JRC) on Friday reported a $148.4 million fourth-quarter loss, slammed by $151 million in impairment charges. Revenue for the period fell 12.5%.

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