Shares of Gannet Inc. (NYSE: GCI) are trading somewhat higher after the largest newspaper publisher reported better-than-expected earnings. To the dwindling number of investors who still care about the beleaguered sector, this is good news. But shares are barely budging because the overall numbers were dismal.Net income was $191.8 million, or 84 cents a share, down 9% compared with a profit of $210.6 million, or 90 cents a share, a year earlier. Excluding one-time items, profit would have been 77 cents, a penny better than Wall Street estimates. Newspaper publishing revenue fell 8.6% to $1.51 billion as retail and classified revenue slumped. USA Today revenue rose 2.1% as national advertising held steady. Revenue from its much smaller broadcasting business fell 7% to $170.2 million.
Noble Financial Group research director Michael Kupinski told Bloomberg that ``the economic weakness has really taken its toll on Gannett. Revenues were a little lighter than what we expected and classified was certainly a major part of that.''
Kupinski recommends the purchase of Gannett shares because the company's results should improve. I am not so sure. The sector's prospects may improve slightly but none of these companies have any business being public. About the only reason to buy them is as a bet that they will be taken private.
Gannett, which for years has been one of the few publishers Wall Street, might be attractive to private equity if the fundamentals in the sector improved. But that may be a long time coming.
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Reader Comments (Page 1 of 1)
4-23-2008 @ 9:23AM
Robert said...
THE PUBLIC & INVESTORS DEMAND A FREE PRESS. WHEN GANNETT REFUSED TO INCLUDE IN THE REPUBLICAN DEBATE CANDIDATE DR. RON PAUL IT BLUNTLY SHOWED THIS CO. IS NOT WORTH ADVERTISING WITH OR WATCHING OR INVESTING WITH.