Gannett Outlook: Not Pleasant Reading
11/17/08 - 04:49 PM EST
Richard Widows
With the unemployment rolls exploding, the prospects for a majority owner of a job-hunting Web site should be bright. But analysts are forecasting that the financial results of Gannett (GCI Quote - Cramer on GCI - Stock Picks), which holds a controlling interest in the CareerBuilder.com employment portal, are not likely to make pleasant reading.
Negatives permeate Gannett's financial results. Fiscal 2007 revenue of $7.44 billion was down 5.2% from the previous year. Earnings per share for 2007 fell 13.3%. One-time items resulted in a second-quarter loss of $10.03 a share vs. a profit of $1.23 a share a year earlier. This year's third-quarter per-share net, reported last month, was down 31.7% from last year. Consensus projections offer no solace. The current fiscal year net per share is projected to be 17% worse than 2007. Analysts expect next year's EPS to show a 25.4% year-over-year decline. Gannett, the nation's largest newspaper publishing company, is saddled by the dual burdens of declining circulation and vanishing advertising revenue. Readership isn't just weakening, it is evaporating at a rapid pace. Last month, the company announced it would eliminate 10% of its newspaper staff, which represented a continuation of previous personnel cuts. Then, earlier this month, both Moody's and Standard & Poor's Ratings Services sliced the ratings on Gannet bonds to just above junk status.
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