With an expanded TV station portfolio, Gannett reported third quarter operating revenues of $1.44 billion, an increase of 15.2% compared to the third quarter of 2013. Broadcasting Segment showed revenue growth of almost 105%. Due primarily to the acquisition of Belo Corp. Digital Segment, revenue grew 4.4% while Publishing revenue was down 3.6%.
"We made great progress again this quarter, both in the outstanding performance of our businesses and the continued transformation of the Gannett portfolio," said Gracia Martore, president and CEO. "Year-over-year revenue comparisons for each of our business segments improved relative to second quarter comparisons, just as we anticipated. Double digit pro forma growth in Broadcasting revenue, which again reached a record high, was driven by robust political ad spending and retransmission revenue."
On August 5, Gannett announced it will create two publicly traded companies. One will be focused on its Broadcasting and Digital businesses, and the other on its Publishing business.
Broadcasting Segment revenues totaled a record $416.5 million. Besides acquisitions, which also included Gannett's pickup of certain London Broadcasting stations, substantially higher political and retransmission revenues drove the increase.
Broadcasting Segment revenues on a pro forma basis were 18.6% higher than in the third quarter last year. The increase reflects a 60.9% increase in retransmission revenue to approximately $92 million in the quarter in addition to substantially higher politically related advertising of $40 million. Pro forma digital revenues in the Broadcasting group were up 24.1% due primarily to growth in digital marketing services products.
Gannett forecasts fourth quarter broadcast revenue to be up more than 115%, while on a pro forma basis, Gannett sees revenue growth to grow in the low-twenties.
Publishing Segment revenues in the quarter were $826.8 million compared to $858.1 million in last year's third quarter, with advertising revenue down nearly 5% and circulation revenue up almost a point.
Operating revenues in the Digital Segment were 4.4% higher compared to the third quarter of 2013 and totaled nearly $200 million. The growth was driven primarily by higher revenues at CareerBuilder.
Martore is bullish on the future. "Gannett drove increases in both overall company revenue and free cash flow this quarter," she said. "As both metrics continue to grow, it gives us even greater confidence that our businesses are well positioned to compete fiercely in their respective markets."