BENGALURU: Gannett Company Inc., (Gannett) reported a 55 per cent increase in its non-GAAP earnings per share (EPS) and a 57 per cent increase in adjusted EBIDTA for the 13 weeks ended 28 December, 2014 (Q4-2014, current quarter) as compared to the corresponding quarter of the previous year.
Earnings totalled $2.92 per share, and on a non-GAAP basis, EPS for Q4-2014 was $1.02. Gannett’s revenue grew 24.3 per cent driven by strong broadcast and digital segment results, says the company. Gannett reported revenue of $1700.97 million in the current quarter, for Q4-2013, the company had reported revenue of $1368.04 million.
On a pro forma basis (had Gannett owned the Belo and London television stations and Cars.com during the same quarter last year and excluding the impact of the sale of a print business and Apartments.com), total company revenues were 4.2 per cent higher in the quarter due primarily to substantial revenue growth at the expanded television station portfolio and strong growth at Cars.com.
Broadcast Segment
Gannet’s broadcast segment revenue increased 117 per cent (went up 2.17 times) in Q4-2014 to $495.27 million as compared to the $228.21 million in Q4-2013. The increase was fuelled by the expansion of the TV station portfolio, as well as significant increases in politically related advertising and retransmission revenues. On a pro forma basis, Broadcasting segment revenues were up 25.0 per cent compared to the fourth quarter in 2013. Substantially higher retransmission revenue that totalled $94.3 million, a 56.3 per cent increase, as well as $92.4 million of political advertising drove the increase. Pro forma digital revenues in the Broadcasting Segment were 16.5 per cent higher reflecting primarily growth in digital marketing services products.
Digital segment
Digital segment increased 76.6 per cent to $345.35 million in the current quarter as compared to the $195.57 million in Q3-2013. Gannett says that the substantial increase reflects primarily the impact of the Classified Ventures acquisition and strong results at Cars.com. Revenues on a pro forma basis in the Digital Segment were up 9.7 per cent driven in large part by revenue growth of 24.8 per cent at Cars.com and 3.8 per cent at CareerBuilder.
Publishing
Publishing segment revenues on a pro forma basis declined 5.9 per cent reflecting primarily softer display advertising partially offset by an increase in digital marketing solutions revenue and digital advertising.
Publishing advertising segment, publishing circulation segment and all other publishing segment revenues dropped 7.8, 2.2 and 9.9 per cent respectively in Q4-2014 as compared to the year ago quarter.
Publishing Advertisement
Publishing advertising revenues were: $543.80 million in Q4-2014 and 589.56 million in the corresponding year ago quarter. The company says that Pro forma advertising revenues declined 8.3 per cent year-over-year. On the same basis all domestic classified advertising category comparisons in the fourth quarter were better than third quarter comparisons. Employment advertising was up 1.5 per cent in the quarter maintaining its positive trend with growth domestically and at Newsquest in the UK.
Publication Circulation segment
Publishing circulation segment revenues were: $282 million in Q4-2014 and $288.43 million in Q4-2013. An increase in circulation revenue at local domestic publishing sites reflecting the beneficial impact of pricing strategies as well as continued strength of the All Access Content Subscription Model was offset by circulation revenue declines at Newsquest, due to the cycling of cover price increases, and USA Today.
All other publishing
All other publishing segment revenues were: $59.68 million in the current quarter and $66.27 million in the year ago quarter. Pro forma Publishing Segment digital revenues increased 2.9 per cent in the quarter reflecting continued growth in digital marketing solutions and digital advertising. Digital revenues at Newsquest were up 20.4 per cent in local currency while digital revenues at USA Today and its associated businesses increased 8.4 per cent. Pro forma digital advertising revenues at local domestic publishing operations were up 6.6 per cent.
Company Speak
Gannett president and chief executive officer Gracia Martore said, “Our strong fourth quarter results cap a milestone year for Gannett -reflecting our bold strategy and continued focus on reshaping and reinventing the company to accelerate growth in today’s multiplatform media landscape. Based on our strong operating performance and balance sheet strength, we are resuming our share buyback program, well ahead of the timeline we had previously anticipated. Our broader and more diverse footprint drove record revenue in Broadcasting for the fourth consecutive quarter and resulted in our highest political revenues ever in a non-presidential election year. We also posted record-breaking Digital Segment revenues, driven by our full ownership of Cars.com, which had a terrific quarter, as well as continued growth at CareerBuilder. On the Publishing side, we continue to innovate and find ways to deepen our connections with our audiences and advertisers through initiatives like USA Today local content editions, which have delighted customers and substantially exceeded our revenue expectations. Even as we achieved this tremendous revenue growth, we remain committed to operating as efficiently as possible, which has continued to improve profitability, including a 57 per cent increase in Adjusted EBITDA as compared to the fourth quarter last year.”
Martore added, “The terrific progress we’ve made across each of our businesses since the launch of our transformation plan three years ago culminated in our biggest news of 2014 - the announcement of our plan to separate into two highly focused public companies. Each company will be a leader in its respective industry with impressive scale and greater freedom to focus its strategy and resources on the most promising, value-enhancing areas of the business. We are on track with the separation and will share more details of our plans for the Publishing and Broadcasting/Digital companies in the coming months.”
FY-2014 Numbers in Brief
Total operating revenues for the full year were 16.4 per cent higher compared to 2013 and totalled $6.01 billion. The increase reflects substantially higher revenue growth in the Broadcasting and Digital Segments to record levels partially offset by a decline in the Publishing Segment. Broadcasting Segment revenues were 102.6 per cent higher due to the Belo acquisition and significant increases in Olympic and political spending as well as retransmission revenue. Digital Segment revenues in 2014 were up 22.8 per cent reflecting the acquisition of Classified Ventures including strong growth at Cars.com and solid revenue growth at CareerBuilder. Company-wide digital revenues totalled $2.05 billion, an increase of 7.4 per cent on a pro forma basis compared to 2013. Publishing Segment revenues were 4.4 per cent lower as advertising revenues declined 5.8 per cent and circulation revenues were down 0.9 per cent.
