Revenue From Stations up 24%; Newspapers Make First Gains in Two Years

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NEW YORK ( -- Gannett Co. posted improved third-quarter results, thanks to strong TV advertising and its first increase in newspaper ad sales in nearly two years.

Gannett reported third-quarter net income of $265.6 million, up 51.9% from the same period in 2001, when results were affected by accounting changes; factoring out those changes, net income was still up 17%. Total revenue rose 4.2% to $1.58 billion.

Ad revenue up
Newspaper advertising revenues rose 1.9%, the first year-over-year quarterly increase since 2000, said Douglas McCorkindale, Gannett's chairman, president and CEO. Meanwhile, ad revenue at Gannett's TV stations was up 24.2%, thanks largely to an influx of political advertising.

The improvement in print

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ads was mainly due to better results at local newspapers, where revenue rose 3%, while national advertising dropped 1% for the quarter and ad revenue at Gannett's flagship publication, USA Today, was down 7%.

Classified advertising rose 2%, thanks to strength in automotive and real estate advertising, while help-wanted advertising remained weak, though it appears to be improving, especially in the smaller markets, Mr. McCorkindale said. He estimated some small community newspapers may see increases in help-wanted advertising in the fourth quarter.

'Optimistic, but cautious'
Overall, Gannett's management is "optimistic, but cautious" for the rest of the year, Mr. McCorkindale said.

Advertising trends are improving in the fourth quarter, particularly in TV, where sales are pacing up in the high 20% range. Thanks to automotive and political advertising, October sales are pacing up nearly 30% and November and December are pacing up in the 20% range, Mr. McCorkindale said. However, print advertising is still too volatile and advertisers are still buying on too short of a lead time to forecast fourth-quarter trends accurately, he said.

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