Gannett Co., the largest U.S. newspaper publisher, is scheduled to report its fourth-quarter results before the stock market opens Monday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Gannett should book a healthy profit for the fourth quarter. Not because advertisers are flocking back to its newspapers, but because the company has spent the past year cutting expenses.
Most recently, the Gannett announced in December that its flagship title, USA Today, will cut its newsroom staff by 5 percent, eliminating 26 jobs. It is also cutting 11 positions at USA Weekend magazine, a weekly insert in other newspapers, and consolidating the rest of the staff with USA Today. The company's other newspapers cut 1,400 positions last summer, or about 3 percent of Gannett's work force.
The company's outlook should improve as well. While publishers are still seeing their revenue shrink, the pace is starting to ease up.
McClatchy Co., for instance, which owns The Miami Herald and 29 other dailies, said ad revenue fell 20.5 percent in the last three months of the year. That compares with a 28.1 percent decline in the third quarter.
Gannett signaled confidence in December that its earnings would match its projections. CEO and President Craig A. Dubow said the company is "comfortable" with the high end of its forecast, which calls for earnings of 48 cents to 62 cents per share.
BY THE NUMBERS: Analysts surveyed by Thomson Reuters are betting the company can edge out an even better profit, predicting earnings of 63 cents per share, on average. That compares with earnings of 69 cents per share a year ago, but that profit was wiped out by impairment charges to account for the falling value of Gannett's newspapers and other assets on its books.
ANALYST TAKE: Benchmark Co. analyst Edward Atorino upgraded Gannett's stock last month to "Buy" from "Hold," citing the company's cost cutting efforts.
"With solid franchises in small local newspaper markets in the U.S. and U.K., and ongoing efforts to expand content through new print and new media products, we believe Gannett is well positioned to weather the prolonged downturn in the newspaper publishing industry," he told investors in a note.
WHAT'S AHEAD: Gannett's TV stations should get a lift in ad revenue this year from political spending during the 2010 midterm elections. And its NBC affiliates will benefit from advertising during the Olympics.
STOCK PERFORMANCE: Gannett shares climbed almost 19 percent to end the quarter at $14.85.
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