Gannett Reports Q1 Profit Decline

Apr 12, 2006  •  Post A Comment

Newspaper and television station owner Gannett reported an 11.5 percent decline in first-quarter profit as the McLean, Va.-based company was hurt by the expensing of stock options and slower growth at its publishing unit.

The company earned a profit of $235.3 million, compared with a year-earlier profit of $265.7 million. The 2006 figure included a noncash expense of $11.2 million related to stock-options issued in the period. New accounting rules that went into effect this year require companies to book the issuance of stock options as an expense.

Revenue rose 6.5 percent to $1.9 billion, driven by a sharp gain in broadcast revenue, which outpaced newspaper advertising and circulation revenue growth.

The company’s broadcasting division, which consists of 21 television stations plus the video service for office buildings, Captivate, posted an 11 percent increase in revenue to a record $182.6 million, reflecting strong advertising during the Winter Olympics on NBC and higher revenue at Captivate. Excluding Captivate, broadcasting revenue was $177.2 million, 10 percent higher than the 2005 figure of $160.8 million.