NEW YORK (AP) - Gannett Co., the largest newspaper publisher in the U.S., reported a 60 percent decline in first-quarter profit Thursday and said the decline in its advertising revenue is accelerating.
Gannett, which publishes USA Today and dozens of other daily newspapers, earned $77.4 million, or 34 cents per share, in the first three months of the year. In the same quarter in 2008, McLean, Va.-based Gannett earned $192 million, 84 cents per share.
Adjusting for one-time losses and gains, earnings came to 25 cents per share. On that basis, analysts had expected 24 cents, according to Thomson Reuters.
That was enough to push Gannett shares up 27 cents, or 7.7 percent, to $3.76 in morning trading.
The stock has been volatile over the past week. After a fund manager, Ariel Investments LLC, disclosed April 9 that it had more than doubled its stake in the company, Gannett’s stock rose more than 50 percent over two trading days. But the shares gave up some of those gains Tuesday and Wednesday as investors looked forward to Gannett’s first-quarter results, the beginning of what is likely to be a dismal earnings season for newspaper companies.
Ad revenue is being hammered throughout the industry. Big advertisers facing financial crises _ especially in real estate, retail and automobiles _ have pulled back, and the Internet has increased competition for many ads, especially classifieds.
Gannett said Thursday its revenue fell 18 percent to $1.38 billion, below Wall Street forecasts for $1.44 billion.
Ad sales in the company’s publishing unit, which includes newspapers, fell 34 percent to $723 million. It marked the ninth consecutive quarter of ad declines for the unit and the sharpest fall in the past two years.
At USA Today, the country’s highest-circulation daily newspaper, ad revenue shrunk by 33.5 percent. USA Today’s total number of paid ad pages in the quarter fell to 527, from 826 a year ago.
Gannett said it has offset some of the revenue declines by cutting costs. Operating expenses in its publishing segment came down 21 percent to about $955 million.
After cutting jobs last year, including 5 percent of USA Today’s newsroom positions, Gannett imposed one-week unpaid furloughs at its U.S. newspapers in the first quarter.
Interest payments on debt cost the company $48.9 million during the quarter, up slightly from $48.5 million in the same period of 2008. Gannett said the uptick was the result of higher interest rates even though its total debt load, which stood at $3.8 billion at the end of 2008, is shrinking.