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The Honolulu Advertiser
Posted on: Saturday, April 17, 2010

Gannett's first-quarter income jumps 51%


By ANDREW VANACORE
Associated Press

Hawaii news photo - The Honolulu Advertiser

Craig Dubow

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NEW YORK Cost-cutting and a less severe drop in advertising revenue boosted first-quarter results for Gannett Co., which owns USA Today and more than 80 other daily newspapers, including The Honolulu Advertiser. Gannett's net income jumped 51 percent despite a 4 percent decline in revenue.

Gannett CEO Craig Dubow declined to give specifics on how ad revenue is shaping up in April. But he told analysts on a conference call that the year was "off to a great start."

He added: "The momentum that we had at the end of the year continued through the first quarter."

Gannett has remained profitable largely by slashing expenses. Last year it cut 1,400 jobs, or about 3 percent of its workforce.

Gannett announced on Feb. 25 that it plans to sell The Honolulu Advertiser, Hawai'i's largest paper, to the owner of the state's No. 2 paper, the Honolulu Star-Bulletin.

David Black, owner of the Star-Bulletin, has put the Bulletin up for sale. If it is not sold, Black will merge the Bulletin and Advertiser, which will likely result in the loss of hundreds of newspaper jobs in Honolulu.

Gannett was the first major publisher to report earnings for the January-March period and could offer a preview of what will come next week from McClatchy Co., Lee Enterprises Inc. and The New York Times Co.

Already Moody's Investors Service sees better indications for the business. The debt-rating agency raised its outlook on the newspaper industry to "stable" from "negative," saying that a recovery in ad spending will ease revenue declines. The rating change could make it less expensive for newspapers to borrow money.

As expected, Gannett reported its smallest drop in ad revenue in more than a year. Its publishing division posted a decline of about 8 percent from the same period a year earlier. That was better than the decline of 18 percent in the final quarter of 2009.

Gains in its broadcast unit helped Gannett post a net income of $117.2 million, or 49 cents per share, compared with $77.4 million, or 34 cents per share, a year earlier.