Buyback Boosts Gannett

Gannett (GCI) earnings fell as newsprint costs rose and TV station revenue slid.

The publisher of USA Today posted a second-quarter profit of $339 million, down 4.5% from the year-earlier $354 million. But per-share earnings rose to $1.37 a share, matching estimates and rising from $1.30 a year earlier, as the company bought back enough stock to keep the bottom line rising.

Gannett bought back 5.3 million shares in the latest quarter, and its share count at June 26 was 248 million, down almost 10% from a year ago.

Revenue rose 3.4% from a year ago to $1.94 billion in the second quarter, while operating cash flow slipped to $634.3 million from $638.5 million a year ago.

The cost of newsprint has been on the rise for several years now. Gannett also owns a U.K.-based publishing unit, and its results were hit by a slow ad environment there.

"We are pleased to announce another quarter of operating revenue and earnings-per-share growth despite the challenges faced by our U.K. and broadcasting operations," says outgoing chief Doug McCorkindale. "Our U.S. newspapers produced industry-leading ad revenue growth, benefiting from growth in local and employment classified advertising."

Broadcasting revenue at Gannett's 21 TV stations was hindered by a soft automotive ad market and a lack of political advertising this year.

Craig Dubow, president and CEO of the Gannett Broadcasting Division, will become president and CEO of Gannett on Friday.

Early Wednesday, Gannett was flat at $73.41.

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