Gannett Co.’s third-quarter profit tumbled 53% amid an advertising slump, but the newspaper publisher’s results still beat raised expectations, helped by cost cuts.
The publisher of USA Today, which said late last month it expected third-quarter profit to exceed Wall Street’s forecasts, surpassed that raised outlook. Concerns remain, however, about the company’s $3.5 billion debt load, its sharp ad revenue declines and its ability to sustain a rebound through cost cuts.
The company’s operating expenses fell 14% in the third quarter through job cuts, salary reductions and other measures. Meanwhile, publishing ad revenue dropped 28% compared to the year-ago period, when it fell 18%.
“Even though they were still down substantially, the ad revenue trend is improving, and the third quarter performance wasn’t as bad as I was expecting,” Barrington Research analyst James Goss said. “It’s continually impressive that Gannett is able to keep cutting back its cost base.” More…