Financial results released today may give some insight into Gannett Co. Inc.‘s decision to lay off a large number of its daily newspaper staffers earlier this month.
This morning, Gannett (NYSE: GCI) reported earnings of $70.5 million, or 30 cents per share for the second quarter of 2009. These earnings look good compared to the second quarter of last year, when the company too a loss of $2.29 billion, or $10.03 per share, thanks to a write-down on declining market losses.
But, operating revenues show a different story. Gannett said operating revenues for the quarter were $1.4 billion compared to $1.7 billion last year, a figure the company attributed to “weakness in the economies of the U.S. and U.K.”
“We continue to position the company for the eventual rebound in the economy and the evolving media landscape as we navigate through this unprecedented economic storm,” Gannett’s CFO Gracia Martore said in a release about the financials. “The economic headwinds, which continued to constrain advertising demand, masked several important achievements in the quarter…In our publishing segment, while advertising revenue comparisons remain difficult, second quarter year-over-year comparisons improved versus first quarter comparisons and June was our best comparison month thus far this year.” (Ed note: emphasis ours)
“The decline in our operating expenses reflects our efforts to achieve efficiencies and further consolidations company-wide, furloughs in the current quarter and significantly lower newsprint expense,” Martore added.
In Gannett’s publishing division, which includes USA TODAY and more than 80 daily U.S. papers, advertising revenues were down 25.8 percent from the same quarter last year, to $1.1 billion. Ad revenues dropped 32 percent to $753.1 million, although ad revenue in the U.S. was only down 27.2 percent. And although revenues were mitigated by decreased expenses (thanks to furloughs and layoffs and other cost-cutting measures) the publishing segment still only managed to generate about $175.3 million in operating cash flow during the quarter.