Gannett sets the tone for a tough earnings period

April 16, 2009

Let the bleeding begin. USA Today publisher Gannett kicked off earnings season for media companies this morning, posting a 60 percent drop in quarterly profit.

Here are some key points:

  • Revenue fell almost 18 percent to $1.38 billion.
  • Publishing ad revenue fell 34.1 percent from last year, with U.S. ad revenue down 28.2 percent and British ad revenue down 38.7 percent.
  • At USA Today, ad sales fell 33.5 percent, and the number of paid advertising pages fell to 527 from 826 last year. USA Today’s paid circulation also likely will fall after Marriott International said this week that it would no longer automatically deliver the paper to its guests.

Don’t expect advertising revenue to look much better for biggest media companies as they roll out their numbers over the coming weeks. As Bernstein analyst Michael Nathanson recently pointed out in a research note, investors have been “looking past the horrid near-term trends to a happier place somewhere out on the horizon” but with earnings here “the recent run-up in media stocks will have resistance as the market realizes that recent trends are not likely to reverse any time soon.”

Keep an eye on:

  • Dominos has found itself in the center of a publicity storm after two employees filmed a prank in one of its restaurant’s kitchens and posted it online (NY Times)
  • ABC Entertainment Group President Stephen McPherson is under increasing pressure to produce a break-out hit (NY Post)
  • Twitter is talking to big web companies about partnerships, but isn’t looking to sell itself (NY Times)
  • Publicis Groupe agencies have added Hewlett-Packard’s personal systems group account in the Europe, Middle East and Africa region following a review (Adweek)
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