Gannett posts 43 pct drop in 1st-qtr net profit, but adjusted profit beats expectations

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MCLEAN, Va. – Gannett Co. said Wednesday that its first-quarter net profit dropped 43 per cent, pulled down by restructuring costs, but its adjusted profit managed to beat Wall Street predictions by a penny.

The media company, which publishes USA Today and owns dozens of newspapers and television stations, posted a net profit of $59.2 million, or 25 cents per share, compared with $104.6 million, or 44 cents per share, in the same quarter of 2013.

Excluding costs related to job cuts, restructuring of operations, tax charges and other one-time items, Gannett said it posted adjusted profit of $108.4 million, or 47 cents per share.

Analysts, on average, expected an adjusted profit of 46 cents per share, according to FactSet.

Revenue rose 13 per cent to $1.4 billion from $1.24 billion, boosted by the company’s acquisition of Belo Corp. Analysts expected $1.41 billion.

Revenue at the company’s broadcast division nearly doubled to $382.3 million, mainly as a result of the Belo acquisition. It also got a boost from higher advertising demand stemming from the Winter Olympics and increased spending on political ads. The company’s retransmission revenue, which it receives from cable and satellite TV operators for allowing them to relay its broadcasts, was also higher.

Meanwhile, revenue at the company’s publishing division fell 3 per cent to $842.1 million. Gannett attributed the decrease partly to the effects of bad weather on advertising and circulation demand in some markets, along with the shift of the Easter holiday to the second quarter of the year.

Advertising revenue fell 5 per cent to $501.3 million, while circulation revenue edged down 1 per cent to $282.1 million.

But the company posted a 3 per cent increase in revenue at its digital division to $179.7 million, helped by strong results at its CareerBuilder website.

Company-wide digital revenue, which included the digital division and digital revenue generated by other businesses, rose 6 per cent to $375.6 million.

Shares of McLean, Va.-based Gannett rose 2 cents to $27.17 in morning trading.

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