Projo’s Parent Company Gannett Reports Dramatic Decline in Revenues, Stock Plummets
Tuesday, March 03, 2020
While the Dow Jones Industrial average recovered on Monday, gaining a record 1,293 points -- a 5% one day gain -- the Providence Journal’s parent company Gannett’s stock continued to fall — losing 6.67% on the day.
The merger of GateHouse Media and Gannett, which was finalized in November, was designed to create the largest newspaper conglomerate in America’s history and to stabilize the finances of the two now married struggling corporate companies. The company owns 261 daily newspapers across the United States.
The stock has now fallen from a 52-week high of $13 to Monday’s close of $4.20 — a 67% loss in value.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTLast Thursday’s financial reports from the merged company paint a bleak future and a reported loss of revenue faster than most of the doomsday predictions.
Revenues Falling
The company lost revenue in print, circulation, and even digital.
According to 4th quarter numbers: Print advertising revenues totaled $240.9 million in the fourth quarter; on a pro forma basis, print advertising revenues were $334.1 million, reflecting continued secular pressures.
- Same-store Legacy Gannett print advertising revenues decreased 20.1% as compared to the prior-year quarter.
- Same-store Legacy New Media print advertising revenue decreased 16.3%, as compared to the prior-year quarter.
- Digital advertising and marketing services revenues were $90.1 million in the fourth quarter; on a pro forma basis, digital advertising and marketing services revenues were $150.3 million.
Legacy Gannett same-store digital advertising and marketing services revenues decreased 1.6% as compared to the prior-year quarter, an improvement from the third quarter trend, reflecting improved digital marketing services results.
Legacy New Media same-store digital advertising and marketing services revenues decreased 0.4% year-over-year.
Circulation revenues totaled $255.6 million in the fourth quarter; on a pro forma basis, circulation revenues were $384.4 million.
Legacy Gannett same-store circulation revenues decreased 10.3% year-over-year, as expected, reflecting the cycling of last year's more aggressive pricing initiatives.
Legacy New Media same-store circulation revenues decreased 7.2% from the prior year.
Commercial printing and other revenues contributed $67.3 million to Publishing segment revenues in the fourth quarter.
More Cuts Coming -- $300 in Total
Michael Reed, Gannett Chairman and Chief Executive Officer, said "Although we acquired Legacy Gannett only six weeks before the end of the quarter, we immediately began implementing our integration plan. By the end of the first quarter of 2020, we expect to have implemented measures that will result in over $60 million in annualized savings.
As a result of these measures, we expect to realize $10 - $15 million of savings in the first quarter, and we expect the savings in subsequent quarters to increase as we continue to implement synergies throughout the year. We remain highly confident that we will complete the implementation of measures in 2020 corresponding to more than half of our $300 million synergy target related to the acquisition of Legacy Gannett."
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