Associated Press
SAN FRANCISCO -- Newspapers may have finally at least slowed their harrowing descent into a financial abyss after three years of plunging revenues, crumbling stock prices and shrinking staffs.
A glimmer of hope came Tuesday when Gannett Co., the largest U.S. newspaper publisher, announced that its third-quarter earnings will be substantially above analysts' forecasts.
Although Gannett's revenue for the period, which ended Sunday, fell slightly below analysts' projections, executives said newspaper advertising sales didn't fall as badly as they did in the first and second quarters.
That's not saying much. Gannett's ad revenue from USA Today and its other print publications dived 33 percent during the first half of the year.
But Gannett's modest progress suggests newspapers might at least be able to recover some of the revenue lost since 2006. Analysts suspect a rebound could begin soon and accelerate next year, particularly if advertising for homes, cars and jobs picks up.
If that happens, newspaper profits should surge because publishers have lowered their costs dramatically by jettisoning thousands of workers, slashing wages and closing offices. Less advertising also means smaller print editions, reducing the need for newsprint -- the industry's second-highest expense after labor.
Gannett, for instance, has shed nearly 5,500 workers since 2007 and imposed other cost-cutting measures.
Excluding one-time charges, Gannett said it will earn 39 cents to 42 cents per share when it reports the results Oct. 19. The average analyst estimate on the same basis had been 29 cents per share, according to Thomson Reuters.
Gannett said its revenue for the period will be $1.31 billion or $1.32 billion -- below the average analyst target of $1.38 billion and 20 percent less than what Gannett reported at the same time last year.
