Publisher Attributes Gains to Improved Advertising Trends

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NEW YORK ( -- Gannett Co. reported strong results for the fourth quarter, thanks to improved advertising trends, including the first year-over-year gains since 2000 in employment advertising and at its flagship newspaper USA Today.

Gannett posted fourth-quarter net income of $347 million, up 13.6%, on $1.73 billion in revenue, up 7% from the same period a year ago. For the year, net income was up 39.6% to $1.16 billion and revenue rose 1.9% to $6.42 billion.

Better than expected
Better-than-expected ad revenue

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in December helped the fourth-quarter performance, said chairman and President-CEO Douglas McCorkindale. Newspaper advertising revenue grew 4% in the quarter, with classified revenue up 6% and national advertising rose 5%. Help-wanted advertising showed sequential improvement every month of the quarter and turned positive in November and December for the first time since late 2000, Mr. McCorkindale said. He cautioned that the improvement in Help-wanted classifieds is still slight and volatile, and the numbers could again slide in the first quarter.

USA Today also showed its first gains since 2000 in the fourth quarter -- a 2% increase in ad revenue -- and January lineage looks good, he said. But Mr. McCorkindale warned national advertising remains unstable and the first quarter and will be affected by comparisons to the year-ago period, when the paper benefited from Olympic-related advertising and advocacy ads for the merger of Compaq and Hewlett-Packard Co.

TV revenue up 27%
Gannett's TV stations also posted strong numbers in the fourth quarter, with a 27% increase in revenue, thanks to record spending in political advertising, Mr. McCorkindale said. The stations' first-quarter sales are pacing up in the single digits in January, down in the teens in February -- due to Olympic comparisons -- and up in the high teens in March, he said.

While all the numbers are positive, Mr. McCorkindale noted that much will depend on whether there is a war in Iraq. He said some advertisers have mentioned concerns about advertising scheduled for late February and early March. But barring a war, the economy is poised to recover gradually, he said.

"We're seeing a positive trend, but a slow positive trend. It's not a 'V' recovery, it's a long 'L'," Mr. McCorkindale said. "I don't want to get too excited about it."

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