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Gannett Co. Inc. reported a drop in net income for the fourth quarter, despite an increase in revenue.
Gannett, which owns more than 80 newspapers including the Democrat and Chronicle and USA Today, reported net income of $103.1 million, or 44 cents a diluted share, down from $116.9 million, or 49 cents a diluted share, a year ago.
Adjusted earnings were 89 cents a share, excluding special items. A year ago, Gannett's adjusted earnings were 72 cent a share.
Analysts had expected earnings of 88 cents a share on revenue of $1.49 billion.
Gannett logged revenues of $1.52 billion, up more than 9 percent from $1.38 billion in the fourth quarter 2011. The company’s digital revenue totaled $375.6 million for the quarter, up nearly 30 percent. Broadcasting revenue increased nearly 44 percent to $287.5 million, thanks to political ad spending, the company said.
Despite print advertising revenue declining 2 percent, overall publishing revenues were $1.04 billion, up from $1.01 billion a year earlier. The company said revenue results benefitted from an extra week during the fourth quarter 2012 versus the same period in 2011.
"We are proud of our strong operating results this quarter with growth in revenue and margin expansion driving strong cash flow,” said Gracia Martore, president and CEO, in a statement. “This caps an extremely productive year in which we successfully implemented our strategy to position Gannett for success in the digital era. For the year, we achieved our first year-over-year increase in companywide revenue since 2006.”
Revenues for full-year 2012 were $5.35 billion, up from $5.24 billion in 2011. The company reported net income of $424.3 million for 2012, down from $458.7 million in 2011.
Operating expenses for the fourth quarter totaled $1.3 billion, up more than 10 percent. Expenses included special charges such as higher costs in its broadcasting segment and the extra week during the quarter. The company also spent $14.1 million on strategic initiatives during the quarter and had a $5.5 million increase in pension expenses.
"Our strategy is gaining momentum, our investments are bearing fruit and we are achieving the results we expected,” Martore said. “We enter 2013 with our businesses performing well and poised for even greater success going forward. We remain confident we are well positioned to achieve our goals and to continue delivering on our promise to return increased value to shareholders.”
Gannett shares (NYSE: GCI) were down 5.3 percent midday Monday to $18.79 a share.