Gannett, largest US newspaper publisher, earns after cutting costs

Cost cutting produced a solidly profitable third quarter for Gannett Co.

But the latest financial results for the country's largest newspaper publisher show another big decline in ad revenue.

Gannett owns USA Today, more than 80 other newspapers and 23 television stations.

Its earnings Monday follow a similar report last week from McClatchy Co., another big newspaper owner that has managed to profit even as timberland boots its main revenue source withers.

Gannett's ad sales in its publishing division dropped 28 timberland mens boots percent from a year ago. That follows a 32 percent decline in the second quarter and a 34 percent timberland boots decline in the first.

Layoffs and other belt-tightening moves helped the McLean, timberland boots Virginia-based company earn $73.8 million, or 31 cents per share.

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Gannett’s USA Today to Impose Leave, Extend Pay Halt

Gannett Co.’s USA Today will enforce a weeklong unpaid leave for about 1,500 employees between the end of this month and July to help counter declining advertising and circulation sales, according to a memo to staff.

A yearlong freeze on pay increases begun in February 2009 also will be extended by at least 90 days, the newspaper’s publisher, David Hunke, said today in the memo.

“National advertising revenues in general were still down from the previous year as were paid advertising pages at USA Today,” Hunke said in the memo. “Circulation sales continued to be lower” in the fourth quarter.

Gannett said in December it would require most local newspaper employees to take five days of unpaid leave this quarter, though USA Today employees originally weren’t affected. The McLean, Virginia-based publisher enforced two weeks of unpaid leave for many workers in 2009.

Ed Cassidy, a spokesman for USA Today, confirmed the memo in an e-mail.

Circulation for USA Today, the second-largest by distribution, fell 17 percent from a year earlier to 1.9 million on an average weekday in the six months through September, according to the latest data from the Audit Bureau of Circulations. That compares with an 11 percent plunge industrywide.

The company last year posted a 28 percent decline in publishing advertising revenue to $2.97 billion, according to a Feb. 1 statement. It didn’t break out USA Today’s ad sales.

Ad Hire

Hunke said in a separate statement today that USA Today has hired Gordon Lee Jones as new senior vice president of advertising, replacing Brett Wilson, who stepped down last year. Jones previously was senior vice president of sales and marketing for Cablevision Systems Corp.’s Newsday.

In December, Gannett said it couldn’t rule out additional unpaid leave time this year. Robin Pence, a Gannet spokeswoman, said in an e-mail message that USA Today’s action today was not part of a larger strategy.

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Will Gannett recover?

Shares of Gannett Co., Inc. the trading session at $15.02 below calculated support at $15.32 breaking current long setups, raising concerns by the bulls, as this move might give the bears the upper hand.

Gannett Co., Inc. is an international news and information company that publishes various daily newspapers in the United States and the United Kingdom, including "USA TODAY". The news company also operates television stations in major United States markets as well as operates websites offering news, information and advertising.

Gannett's stock was trading in a well defined range with support at $15.32 and resistance at $16.99; given that this range was broken traders will be closely monitoring the stock?s price action for clues of direction.

From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that Gannett's stock is still near the broken support, traders will be focusing on $15.32 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in Gannett can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes at previous support of $15.32. For traders wanting to establish a long position the current setup is to wait for the stock to get back to calculated support, given that the stock is still near from this level.

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