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Gannett (NYSE: GCI) lost more than half its third-quarter profits year-over-year, as the newspaper industry shows yet another sign of decline. A substantial drop in ad revenue was the primary reason for the plunge.
The newspaper giant was able to stay in the black because of aggressive cost cutting, a move that can work for only so long. For now, it's the most popular option available to the beleaguered industry, as evidenced by a New York Times (NYSE: NYT) announcement that it would slash another 100 positions from the newsroom, and more positions elsewhere.
Advertising sales were off 28% for Gannett's publishing division, which includes USA Today and 83 other newspapers. This follows enormous drops of 34% in the first quarter and 32% in the second. Overall revenue fell 18% from 3Q2008 to 3Q2009 -- to $1.34 billion. The company has also struggled with circulation.
Layoffs were a major part of the cost reduction at Gannett, though lower newsprint costs and other measures helped, as well. These efforts led to earnings of $73.8 million for the quarter (31 cents a share). A year ago, the company posted quarterly earnings of $158.1 million (69 cents per share). Analysts expected earnings 41 cents per share, and Gannett reports that it would have posted a result of 44 cents if not for certain unusual items.
Layoffs, other belt-tightening moves and falling newsprint costs helped the company earn $73.8 million, or 31 cents a share. That was down from $158.1 million, or 69 cents a share, in the quarter last year.
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