This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gannett Craters Despite Beating Street

(Gannett earnings story updated to include closing stock prices and details from the company's Monday conference call.)

MCLEAN, Va. ( TheStreet) -- USA Today publisher Gannett (GCI - Get Report) turned in fourth-quarter results Monday that surpassed Wall Street expectations, but the stock dropped sharply nonetheless.

The newspaper chain, which also operates a slew of dailies in midsize cities across the country, appeared, at least on the surface, to affirm the conventional wisdom that the advertising recession had eased.

Gannett said revenue from print ads came to $790.8 million in the fourth quarter, down 18% from the same period of 2008, when it took home $963.4 million. In the second and third periods of the year, the company suffered ad revenue declines of about 30% compared to the corresponding year-ago periods.

Still, the comparisons with 2008 grew steadily easier as the year progressed. Many have argued that the ad recession -- though strongly exacerbated by the general economic gloom in the wake of the financial meltdown -- has been ongoing for years as reading habits shift from hardcopy to digital. Thus, the terrible numbers of 2009, including Gannett's fourth quarter, compare to already downtrodden figures from a year ago.

Further, Gannett's bottom-line performance has depended on a series of ferocious cost cuts and scaled-back content as the company laid off staff (24% of its workers in 2009), eliminated sections and reduced page counts throughout its many titles.

By the close of trading Monday, Gannett shares had lost $1.13, or 7%, to $15.02, after falling as low as $14.12 intraday. The stock enjoyed a torrid December, gaining more than 60% in value as investors ran up the stock in anticipation of an end to the ad recession. It's a trend that began as early as last summer, after Gannett and several other newspaper chains (including McClatchy (MNI - Get Report), Lee Enterprises (LEE - Get Report) and even the New York Times (NYT - Get Report)) lifted themselves off the mat after a period when default and bankruptcy weren't out of the question.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
GCI $34.95 0.00%
LEE $3.03 0.00%
MNI $1.67 0.00%
NYT $12.99 0.00%
SSP $22.96 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs