Tue - 21.11.2017

Disappointing fiscal losses for Lee and Gannett

Disappointing fiscal losses for Lee and Gannett

US newspaper companies aren’t off to a great start this fiscal year, with both Lee Enterprises and Gannett Co. reporting large quarterly losses.

Lee revealed that the company lost $26.6 million for the second fiscal quarter ending March 25, or the equivalent of 54 cents lost per share, The Washington Post reported. Last year at this time, Lee reported a loss of $1.3 million, or 3 cents per share.

The vast losses can be contributed to refinancing and reorganization costs, according to a press release. Taking those costs out of the equation, the adjusted loss was 3 cents per share, the press release said.

Operating revenue decreased by 3.6% to $172.3 million, the press release said. While combined print and digital advertising revenue fell 5.3%, digital ad revenue rose by 9.9%.

According to The Washington Post, Lee filed for protection from bankruptcy this past December to refinance its $1 billion debt. Lee CEO Mary Junck received a controversial $500,000 bonus for securing the refinancing plan, the St. Louis Business Journal reported.

“We continue moving rapidly forward on both digital and print initiatives,” Junck said in the press release. “We expect that fast pace to continue for some time as our business evolves in the digital age.”

Gannett similarly revealed decreases in revenue due to reorganization costs, the International Business Times reported. Gannett reported a drop from 37 to 28 cents per share for its first quarter as compared to last year, the article said.

“Our first quarter results were impacted by spending on strategic investments and advertising softness, particularly during January’s industry-wide slowdown. Improving advertising activity in February and March, while encouraging, did not overcome the slow start to the year,” said President and CEO Gracia Martore in a press release.

Like Lee, overall advertising revenue dropped steeply (8.4%), while digital ad revenue increased (6.8%), according to the press release.

As we previously reported, Gannett is implementing paywalls for 80 of its daily newspapers this year, with the exception of USA Today.

Martore mentioned the new paywall model in the press release: “Key highlights from the first quarter include launching a new all-access, all-platform content subscription model in six markets, rolling out Digital Marketing Services in our top markets and paving the way for important new advertising and marketing revenue opportunities through the expansion of our USA Today Sports Media Group.”

Taking into consideration the companies’ refinancing and restructuring issues, the quarterly losses may not be as alarming as they seem; even with adjusted numbers, though, there is much opportunity for improvement. Perhaps the rise in digital advertising revenue will gain more momentum, as it seems to be a cross-company trend.

Sources: Lee Enterprises, Gannett, The Washington Post, St. Louis Business Journal, International Business Times


Gianna Walton


2012-04-18 12:24

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