McLEAN, Virginia - Gannett Co., the nation's largest newspaper publisher (and parent company of WKYC) on Wednesday reported a 36 percent drop in second-quarter earnings as the newspaper industry's woes caused a sharp decline in revenue. Shares plunged more than 12 percent.The profit of $233 million, or $1.02 per share, compared with a $366 million, or $1.56 per-share profit in the year-ago quarter. The earnings matched expectations of Wall Street analysts surveyed by Thomson Financial.
The company's shares dropped $2.09 to $15.24 in morning trading.
Gannett, publisher of USA Today and 84 other U.S. dailies, sold several newspapers in the year-ago quarter that added 32 cents per share to earnings. Excluding the sale, profit fell by 18 percent.
Revenue fell 10 percent to $1.72 billion in the quarter.
Gannett stock has lost two-thirds of its value in the last year.
The company announced last month that it plans to take an accounting write-down of $2.5 billion to $3 billion to reflect the company's declining market value. In a press release issued Wednesday, the company said the exact amount has not yet been determined, but narrowed the range slightly, to between $2.6 billion and $2.9 billion.
The write-down will be included in the second quarter in an amended statement to be filed before Aug. 8.
For the year, Gannett has so far earned $424.5 million, or $1.85 per share. That's down 26 percent from the first half of 2007, when it earned $576.2 million, or $2.45 per share.
The vast majority of lost revenue in the quarter stemmed from a 14 percent drop in advertising revenue in the company's publishing business. Retail advertising fell 8 percent, and classified advertising fell 19 percent.
At the flagship USA Today, the nation's largest newspaper, advertising sales fell 17 percent in the quarter.
Newspapers across the country have struggled not only with the generally weak economy but with eroding circulation and a migration of advertising dollars to the Internet. Newspaper Web sites are seeing increased ad revenue, but not nearly enough to offset losses on the print side.
Gannett's broadcasting segment, which includes 23 television stations in the U.S. and accounts for about a tenth of the company's overall revenue, reported a 6 percent drop in revenue, to $193 million.
To read the complete news release from Gannett: CLICK HERE
Courtesy: The Associated Press
