* Q1 adj EPS 37 cents vs. Wall St estimate 28 cents
* Records 50,000 digital-only newspaper subscribers
* Newspaper advertising revenue down 4.5 pct to $526.5 mln
By Jennifer Saba
April 23 Gannett Co Inc reported higher
first-quarter revenue and profit on Tuesday, partly on the
strength of its broadcast results but newspaper advertising
sales were still weak.
Gannett, the largest newspaper chain in the United States,
is starting to benefit from a pay model adopted last year for
its digital newspaper products.
Digital revenue at its publishing segment jumped more than
75 percent as more people paid to read news online and through
apps for smartphones and tablets. Gannett Chief Executive Gracia
Martore said the company has 50,000 digital-only subscribers to
Newspapers across the United States from The New York Times
to The Chicago Tribune have started charging readers to get
access to its digital products in an effort to offset punishing
declines in advertising revenue.
Overall, the industry has a way to go in getting digital
subscription revenue to account for more of the total pie.
Digital revenue for the industry, including subscriptions and
advertising, represented only 11 percent of the $38.6 billion in
total 2012 revenue, according to the Newspaper Association of
At Gannett, results at the numbers for its publishing
division - which represents 70 percent of total revenue -
indicated it was still struggling with advertising declines.
Subscription revenue could not fully push up total revenue
at its publishing division, which slipped 0.3 percent to $871.2
million. Newspaper advertising sales fell 4.5 percent to $526.5
Several analysts on Gannett's earnings call questioned
executives about how much more Gannett can increase subscription
Digital-only subscriptions are forecast to grow to about
300,000 by the beginning of 2014, Martore said on the call,
adding that there would be additional opportunities to charge
for content down the road.
Shares of Gannett fell nearly 1 percent to $20.84 on
Gannett is the publisher of 82 U.S. newspapers, including
USA Today, The Arizona Republic and The Des Moines Register. It
also operates 23 TV stations.
Total revenue rose 1.6 percent to $1.24 billion, helped by
an increase in broadcasting revenue. That was in line with
analysts' expectations, according to Thomson Reuters I/B/E/S.
Quarterly net income rose to $104.6 million, or 44 cents per
share, from $68.2 million, or 28 cents per share, in the same
period a year before.
Adjusted for specials items, including cost cuts and a tax
benefit, earnings were 37 cents per share compared with
analysts' estimates of 28 cents.