Gannett, When Beating Earnings Does Not Matter (GCI)

Gannett Co. (NYSE: GCI) is still one of the Warren Buffett media investments,  but that is not helping the reaction from Wall Street to the Main Street newspaper (and media) player.The company reported a drop of about 33% in its fourth quarter profits due to declining ads in the newspapers and due to lower TV ad revenues.  The growth in digital ads can only replace so much. Ad revenues in the newspaper unit were down by 7.1%.

What is interesting is that the results were actually better than expected.  Gannett managed to beat expectations by $0.03 at $0.72 in earnings per share.  Total company revenues fell by about 5% from a year earlier $1.39 billion, mostly in-line with expectations.

Gannett shares are down 7.1% at $14.15 after this morning’s report on earnings and the 52-week range is $8.28 to $18.93. The fear is that the newspaper business is going to be the cigarette business, except even worse, with secular decline on the horizon regardless of the economy.