LONDON (Brand Republic) - Shares in UK and US newspaper publisher Gannett fell 35 cents to $62.70 (£43.95) after it reported a 14% fall in first-quarter earnings following a depressed US advertising market and rising newsprint costs.
First-quarter net income fell to 66 cents a share, just behind analyst expectations of 67 cents a share. This compared with $3.44 (£2.41) a share for the same period in 2000, which was boosted by the sale of Multimedia Cablevision.
Revenues rose 19% to $1.57bn (£1.10bn) due partly to the acquisition of a number of businesses last summer including the £444m acquisition of News Communications & Media in the UK, Central Newspapers in the US and 19 daily papers from Thomson Corporation, also in the US.
USA Today, the publisher鈥檚 flagship title, saw its advertising revenues fall 20% for the quarter. The company said it had been hard hit by the lack of millennium-related advertising, a fall in dotcom advertising and a slump in help-wanted advertising.
However, Gannett has fared better than its main rivals. Dow Jones & Co, publisher of The Wall Street Journal reported an 81% decline in earnings while The New York Times Company reported a 26% fall. Both companies have announced plans to cut their workforce.
Douglas McCorkindale, Gannett CEO, said the company 鈥渨on鈥檛 beat its 2000 second-quarter earnings figure鈥. Analysts forecast that the company will report earnings of 99 cents a share for the second quarter against $1 a share last year.
McCorkindale added that Gannett is keeping a close eye on costs, but will not lay off employees across the board.
Newsquest, Gannett鈥檚 UK subsidiary which publishes 15 daily newspapers and a string of other local newspaper titles, made 鈥渟olid contributions鈥 to the company鈥檚 cash flow because of strong advertising demand in the UK.