Gannett Co., which publishes USA Today and more than 80 daily newspapers, reported a 22 percent decline in its second-quarter net income on Monday, as increases in its digital and broadcast revenue were not enough to make up for the ongoing decline in its newspaper business.
Ad revenue in its publishing division, which includes both print and digital and makes up for about half of Gannett's total, dropped nearly 7 percent to $646.9 million. Company-wide digital revenue, meanwhile, grew 13 percent to $276.2 million. Revenue at its broadcasting segment increased slightly to $184.4 million from $184 million.
Print advertising revenue has been shrinking across the newspaper industry as publishers as advertisers turn to free or cheaper alternatives online. This was exasperated by the financial meltdown and subsequent economic downturn.
On Monday, Chairman and CEO Craig Dubow answered an analyst's question about Gannett's newspaper advertising trends during a conference call.
QUESTION: Were there any notable changes monthly as the quarter progressed? And any insights into July? And then on the circulation front, all staying in newspapers, could you give us a sense of sort of improvement? Was it volume driven or price?
DUBOW'S ANSWER: Let me just start with the circulation side. As you know ... Bob (Robert Dickey, president of U.S. Community Publishing) has had a major effort, particularly on Sunday. We are seeing positive results in that end, and that is the driver behind that part of it, which is really exciting when you consider what we have been facing.
We have really made an effort from a design standpoint, and have found yet further ways to further engage the consumer for multiple hours on Sunday. And what we are learning from that, I think, will further help us as we continue to move forward.
FOLLOW-UP FROM GRACIA MARTORE, CHIEF OPERATING OFFICER: With regard to newspaper ad trends during the quarter, I'd say obviously April was a little bit better month because of the later Easter, and also we had some things earlier in the quarter in the U.K. that helped numbers. I think June actually was a better month sequentially. So felt good about the way we closed out the quarter, and I'd say as we look into July, the sense we've gotten, and remember, it's extremely early in the quarter, is that things are perking along about in the same way.
A little bit of improvement here and there, certainly nothing that looks less satisfying than what we achieved in the second quarter. So I think overall the quarter is getting off to the same sort of momentum start as the second quarter ended.