Earnings Preview: Gannett to report 1st-quarter results

OVERVIEW: Gannett, publisher of USA Today, said February operating revenue fell 7.2 percent, hurt by a continued decline in real estate and employment ad sales. Total revenue for the period ended March 2 slid to $528.5 million from $569.5 million a year earlier, following a 7.5 percent decline in January revenue.

The McLean, Va.-based company said falling revenue from broadcast and newspaper ad sales combined with an impairment charge drove fourth quarter earnings down 31 percent.

Newspaper publishers have struggled as consumers and advertisers continue to move to the Internet. Companies have tried to offset declining ad sales by ramping up Web operations and implementing more cost control efforts.

In January Gannett named PointRoll Inc. Chief Executive Chris Saridakis to the newly created position of senior vice president and chief digital officer.

Media company PointRoll is a Gannett unit.

BY THE NUMBERS: Last month Gannett Chief Financial Officer Gracia Martore said at an analyst meeting the company was "comfortable" with earnings per share guidance between 76 and 78 cents for the quarter, not including a gain on the sale of land equal to about 7 cents per share.

Analysts surveyed by Thomson Financial predict first-quarter net income of 77 cents per share on revenue of $1.71 billion. Estimates typically exclude one-time items.

ANALYST TAKE: Peter Appert of Goldman Sachs anticipates a difficult quarter for the entire newspaper sector.

"We expect a first-quarter ad revenue decline of around 10 percent to weigh heavily on earnings, as managements will find it nearly impossible to fully offset this level of revenue decline with cost cutting," he wrote in an April 3 note to clients.

Lehman Brothers analyst Craig Huber predicts a first-quarter profit of 78 cents per share.

STOCK PERFORMANCE: Shares of Gannett slipped 23 percent during the quarter.