By Jennifer Saba
Feb 4 (Reuters) - Gannett Co, which owns the largest newspaper chain in the United States, reported lower quarterly revenue and profit on Tuesday but said its television revenues were expected to jump 100 percent this quarter following its acquisition of Belo.
Gannett, which is diversifying away from print and toward TV stations, acquired Belo last year for $1.5 billion, nearly doubling its broadcast holdings to 43 stations from 23.
It is placing big money on TV because newspapers are having a difficult time shaking a persistent advertising slump which has dogged the industry for several years.
“Broadcasting continues to be the star performer,” said Ed Atorino, an analyst with Benchmark Co.
“Newspaper advertising continues to decline. There is very little sign of improvement.”
The upbeat TV revenue outlook helped push Gannett shares up 3.8 percent at $27.53, outperforming a broadly flat market.
For the fourth quarter, total revenue at Gannett decreased 6 percent to $1.37 billion. The result was in line with analysts’ expectations, according to Thomson Reuters I/B/E/S.
The quarterly revenue result strips out an extra week in the fourth quarter of 2012.
For the newspaper division, which publishes USA Today, revenue dropped almost 5 percent to $944.3 million as advertisers pulled back on spending, and circulation revenue growth stalled.
Gannett rolled out a digital pay model last year that helped boost subscription revenue.
At its broadcast division, revenue fell almost 16 percent to $228.2 million. During the fourth quarter, Gannett benefited from a windfall in political advertising. Excluding that, broadcasting revenue would have been about 23 percent higher.
Excluding special items and the extra week, net income fell to $152.5 million, or 66 cents per share, from $207.9 million, or 89 cents per share, in the same period last year.