Already a Bloomberg.com user?
Sign in with the same account.
Gannett Co. (GCI), the owner of 82 daily newspapers including USA Today, fell the most since October after reporting a 25 percent drop in first-quarter profit as advertising revenue declined.
Gannett tumbled 7.7 percent to $13.89 at the close in New York, the largest decline since Oct. 17. The shares have risen 3.9 percent this year.
Net income fell to $68.2 million, or 28 cents a share, from $90.5 million, or 37 cents, a year earlier, the McLean, Virginia-based company said today in a statement. Sales dropped 2.6 percent to $1.22 billion, missing the average analyst projection of $1.24 billion.
Chief Executive Officer Gracia Martore, who took over in October, is struggling to revive revenue growth as the newspaper industry loses ad business to Internet companies such as Google Inc. (GOOG) and Facebook Inc.
“We see a pretty meaningful deceleration in publishing advertising revenues from the fourth quarter of last year to the first quarter of this year,” Citigroup Inc. analyst Leo Kulp said in a telephone interview.
After a 7.2 percent drop in ad sales in the last quarter of 2011, Gannett saw an 8.3 percent decline in the most recent quarter, said Kulp, who rates the shares neutral.
Sales in the publishing division, the largest unit, decreased 6 percent during the most recent period as advertising and circulation fell, the company said.
Gannett’s focus on improving digital assets is the best way to improve growth, said Paul Sweeney, senior media analyst for Bloomberg Industries.
“The reality is that such a transformation for any publisher is a long shot at best” and will likely take some time, he said.
Profit excluding some items declined to 34 cents a share in the quarter ended March 25. Analysts predicted 31 cents, the average of estimates compiled by Bloomberg.
((The company hosted a conference call at 10 a.m. to discuss results. Go to http://www.gannett.com to listen.))
To contact the reporter on this story: Edmund Lee in New York at email@example.com
To contact the editor responsible for this story: Ville Heiskanen at firstname.lastname@example.org