Gannett Broadcasting Revenues Slide 3.4% in Q3

Shortfall Blamed on Lower Political-Advertising Revenues

Gannett’s broadcasting business saw its revenues slide 3.4% in the third quarter, a sharper decline than that seen in the second quarter.

In the company’s Q3 results, the broadcasting division recorded revenues of $189.5 million versus $196.2 million in the same quarter a year ago. The drop was blamed on the lack of political-advertising revenues, which accounted for $19 million of the Q3 2006 number.

The broadcasting results include revenues from online and Captivate Networks, which delivers programming and advertising to office-building elevators. Online assets saw revenue growth of 37.6% while Captivate grew 17.7%. Broadcasting’s operating income dropped 10.3% to $71.5 million from $79.7 million in Q3 2006.

Last quarter, the company recorded revenues from its broadcasting segment of $204.7 million, which was down just marginally from the $205.4 million in Q2 2006.

Overall, Gannett reported Q3 earnings per share of $1.01 versus $1.08 in the same quarter a year ago. The consensus Wall Street estimate was for $1 per share. Gannett’s consolidated operating revenues were down to $1.81 billion in Q3 from $1.88 billion in Q3 2006 largely on softer advertising. Newspaper-advertising revenues sank 5.6% year-over-year to $1.187 billion in the quarter.

Gannett has come under speculation for possibly spinning off its broadcasting assets after peers Belo and E.W. Scripps announced plans to split up their own media assets into separately traded stocks.

Belo is separating its newspaper and broadcasting business, while Scripps will split its cable networks from its traditional newspaper and broadcasting divisions. However, a similar move by Gannett may be less pressing given the smaller proportional size of its broadcasting business.

On the company’s conference call, chairman and CEO Craig Dubow quelled speculation that the company might spin off its broadcasting assets. Dubow said the company has discussed the developments at Belo and Scripps, but “our position has not changed.” He drew a comparison to the Scripps split-up, pointing out that the newspaper and broadcasting businesses were kept together.