NEW YORK (TheStreet) -- My favorite "dinosaur" stock has done it again. USA Today publisher Gannett (GCI), which appeared to be on its' deathbed just a few years ago, put up another better-than expected quarter.
I call Gannett a "dinosaur" stock because the presumption has been that newspaper names are going the way of the dinosaur. Between intense competition from the Internet as a news source, and declining advertising revenue, newspapers appear to be a modern day version of the buggy whip, a device that was no longer needed once the automobile went mainstream.
Of course, Gannett is actually much more than a newspaper company; in the third quarter, nearly 37% of revenue was from non-publishing related activities. The broadcasting segment, which generated just 18% of total revenue, was responsible for nearly 55% of operating income. The digital segment generated 14% of revenue, and more than 18% of operating income.
While publishing advertising revenue fell 6.6%, publishing circulation saw a 5.6% uptick. That's the first time circulation revenue has grown in five years. It's been just over a month since the company debuted its' new design for the flagship USA Today, and it is too early to tell if there will be any impact.Third quarter revenue rose 3.4% to $1.309 billion. While that quarter over quarter increase may not seem all that remarkable, it's been years since Gannett had a quarter/quarter revenue rise. Furthermore, revenue exceeded the $1.29 million consensus estimate. On the earnings front, the company bottom lined $133.1 million, or 56 cents per share, also better than the 53 cents per share consensus. The company continues to generate significant free cash flow, including $163 million for the quarter. That's what has allowed Gannett to increase the dividend, which now provides a 4.5% yield. While it appears that the company has the ability to raise the dividend further, the impending increase in taxes on qualified dividends (from 15% to ordinary income rates, as high as 43.4% including the new Medicare 3.8% surtax leveled by "Obamacare") may preclude the company from doing so. It's too early to tell on that front.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV