Gannett Co. Inc. (GCI) reported second-quarter 2013 results before markets opened this morning. The media company posted adjusted diluted earnings per share (EPS) of $0.58 on revenues of $1.3 billion. In the same period a year ago, the company reported EPS of $0.56 on revenues of $1.31 billion. Second-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.58 and $1.33 billion in revenues.
Publishing revenues fell 1.7% due to lower advertising revenues even as Gannett reported a “substantial” increase in circulation. The rise in circulation revenues was attributed to the company’s all-access content subscription model. Digital revenues were up, but not enough to offset entirely the loss of print advertising.
Broadcasting revenues rose 3.2% year-over-year, largely due to higher retransmission revenues, which were up 62.3%. The loss of political advertising in a non-election year cost the company $9.9 million.
Gannett said it expects a revenue decrease in the mid-teens in the third quarter. In addition to last year’s elections, the Summer Olympics provided a $75 million to the company’s 2012 third-quarter revenues. Excluding the impacts of political advertising and the Olympics, Gannett expects television revenues to be higher by a percentage in the mid-teens.
Digital revenues rose 2.9% primarily due to the company’s CareerBuilder website. The all-access content model drove an overall 20.1% increase in company-wide digital revenues.
The company’s CEO said:
Our long-term strategic plan -- with a focus on both investment and execution -- continues to position us for success well into the future. Gannett's pending acquisition of Belo, and finding new ways to get content and offerings to the right user at the right time, are steps in our long-term strategy.
Gannett’s $2.2 billion acquisition of Belo Corp. (BLC) is expected to close by the end of this year. The deal will give Gannett a total of 43 television stations, of which about half will be in the top 25 U.S. TV markets.
The consensus forecast for the third quarter calls for EPS of $0.46 on revenues of $1.28 billion. The current full-year forecast calls for EPS of $2.21 on revenues of $5.275 billion.
Gannett’s shares are down 2.1% in premarket trading this morning, at $25.81 in a 52-week range is $13.76 to $26.88. Thomson Reuters had a consensus analyst price target of around $27.80 before today’s report.