NEW YORK (
will likely look to rising revenue from its broadcasting segment, driven by political campaign advertising, to offset an expected decline in its publishing revenue in the third quarter.
Analysts expect third quarter earnings per share to be 50 cents according to
, while Benchmark analyst Edward Atorino expects earnings to come in at 54 cents a share .
The company's second-quarter earnings
were up more than 150% to $195.5 million, or 81 cents per diluted share. Advertising revenue for the company's publishing unit, the company's largest business segment, declined 5.7% to $692.2 million. U.S. ad revenues were down 4.6% while revenue for U.K. subsidiary Newsquest were down 6.4%
Atorino anticipates that a 4% year-over-year decrease in newspaper revenue will be offset by a 23% increase in broadcasting revenue. He expects the television advertising revenue to see gains attributed to the overall economic recovery and more specifically, the upcoming November midterm elections.
"The 2010 elections could add as much as $100 million to Gannett's television advertising revenues during the year," Atorino said, "mostly in the second half."
The publishing and broadcasting company publishes
, owns more than 80 smaller daily newspapers and operates more than 20 television stations. With the recent industry push for Web presence, Gannett is adapting to the digital age by distributing its content on the Internet, through mobile devices and on social media platforms.
Gannett's biggest profit driver, like most publishing companies, is its advertising segment.
The decline of publishing ad revenue has been decelerating
. In the first quarter of 2010, ad revenue was down almost 8% and in the second quarter, ad revenue dipped 5.9%.
Atorino expects the newspaper advertising revenue to continue to fall at a declining rate, with a 5% year over year decline forecast for 2010.
Gannett reduced its debt by $170 million to $2.6 billion in the second quarter, down more than $1 billion from the end of 2008. Atorino projects that debt reduction will continue to be a priority for use of the possible $700 million in free cash flow in 2010 Gannett could generate in 2010.
-- Written by Theresa McCabe in Boston.
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