Gannett Co., the largest newspaper publisher of U.S. said on Monday that profit in the first quarter dropped 8.9 percent owing to the steep decline in classified advertising sales and a drop in television revenue. The hitches of weak U.S. economy are quite palpable.
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The McLean, Va., newspaper publisher said that net income fell to $191.8 million, or 84 cents a share, from $210.6 million, or 90 cents, a year earlier.
The results are inclusive of an after-tax gain of $15.8 million, or 7 cents a share, on the sale of land. Excluding that gain, Gannett would have earned 77 cents a share in the three months.
Sales dropped 8.4 percent to $1.68 billion.
The company, which is the owner of USA Today, was expecting to be hit by subprime-mortgage crisis, tighter credit requirements and other difficulties, as it said in December.
Gannett chairman and chief executive, Craig Dubow, said, "As we have outlined for you for the past couple of quarters, real estate is very challenged, particularly in some key Gannett states, and that is now dragging other segments down. That drag has spread as the turmoil in the markets continues."
Advertising revenue for USA Today rose 2.1 percent, thanks to strong national sales, the company said. However, paid ad pages fell to 826 from 904 in the first quarter of 2008.
Publishing advertising revenue in March tumbled 13 percent, as classified revenue, dropped 18 percent, in part because Easter fell in March this year rather than in April, as it did in 2007.
Within classified, real estate revenue fell 26 percent, help-wanted dropped 24 percent and automotive declined 13 percent during the month.
Gannett went up19 cents to $28.17 at 11:41 a.m. in New York Stock Exchange composite trading. The stock had dropped 28 percent this year before today.
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