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Gannett’s net
equals forecasts

The Honolulu Advertiser's
parent earned nearly $295 million
in the fourth quarter

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By Seth Sutel
Associated Press

NEW YORK (AP) - USA Today publisher Gannett Co. posted flat net earnings for the fourth quarter Thursday and warned that slower ad spending could affect the first quarter of 2001.

Gannett, the largest newspaper publisher in the nation, earned $294.9 million in the fourth quarter, or $1.11 per share, in line with the forecasts of analysts surveyed by First Call/Thomson Financial.

That compared to $294.6 million or $1.05 per share in the same period a year ago, but the year-ago figure included a $10 million gain from discontinued cable operations. Without those gains, earnings from continuing operations rose 4 percent.

Gannett had reported earlier Thursday that its per-share earnings were $1.12 in the fourth quarter, but the company corrected the figures later that day. Spokeswoman Tara Connell cited a "mathematical error based on rounding."

The report included results from several recent acquisitions, including News Communications & Media, a British newspaper publisher; 19 newspapers from Thomson Newspapers Inc.; and Central Newspapers Inc., parent company of The Arizona Republic and The Indianapolis Star.

Total revenues from the period jumped 30 percent to $1.89 billion from $1.46 billion in the same period a year ago. But Gannett said that its revenues would have grown 6 percent if it had owned the same set of properties in both periods.

In a conference call with analysts, chief executive Douglas H. McCorkindale said Gannett was expecting a difficult first quarter, due to a slowdown in advertising compared with a year ago, when advertising levels were still benefiting from dot-com spending and millennium-related events.

"It'll be a tough quarter because it's starting off very slow on the advertising side and the comparisons are going to be tough," McCorkindale said.

Shares of the Arlington, Va.-based Gannett were down 36 cents to $64.92 on the New York Stock Exchange.

Like other newspaper publishers, Gannett's fourth quarter was comprised of 14 weeks compared to 13 weeks in the same period a year ago. Gannett did not break out what its revenues would have been without the effect of the extra week.

Advertising revenues at the company's flagship newspaper USA Today rose 6 percent during the quarter despite a 2 percent decline in paid advertising pages to 2,169.

Ad revenues for all of Gannett's 99 newspapers also grew 6 percent in the quarter, had the company owned the same assets compared to a year ago, while ad volume increased 5 percent.

Climbing newsprint costs continued to affect Gannett, as it has other newspaper publishers. Newsprint costs jumped 46 percent during the quarter and 20 percent for the year due to several acquisitions, higher usage and prices. Taking away the effect of the acquisitions, newsprint costs still would have increased 17 percent in the fourth quarter and 2 percent for the year.

Revenues from Gannett's 22 television stations rose 13 percent, which the company attributed to election-related advertising spending.

For the year, Gannett posted net earnings of $1.72 billion, which included a gain of $744.7 million from the sale of cable systems. Without those gains and other one-time items, full-year earnings from continuing operations were $971.9 million, up 10 percent from $886.6 million in 1999. Revenues rose to $6.22 billion from $5.10 billion.