NEW YORK (AP) — Newspaper company stocks fell Monday after Gannett Co. issued financial results that showed no signs of a recovery for the industry any time soon.
Gannett, which owns USA Today and 81 other daily newspapers, is the nation’s largest newspaper publisher and a bellwether for the industry.
On Monday, Gannett said earnings and revenue fell during the July-September period. The results met Wall Street’s expectations.
Nonetheless, investors seemed focused on a persistent decline of Gannett’s newspaper ad business, which accounts for most of the company’s revenue. Revenue at Gannett’s publishing segment, which includes ads sold in newspapers and their websites, declined 5 percent to $918 million from $969 million. The company had warned investors earlier that advertising revenue in its newspaper division fell during the quarter, extending a decline that began in 2006.
President and CEO Gracia Martore said Gannett’s earnings “reflect the positive impact of several strategic initiatives, particularly our digital efforts, but also the challenges of managing our businesses in the midst of a tremendous amount of economic uncertainty.”
The results sent Gannett’s stock down 93 cents, or 8.5 percent, to $10.01 in afternoon trading Monday. The stock is down 33 percent since the beginning of the year, compared with a 3.9 percent decline for the Standard & Poor’s 500 index.
Gannett was the first newspaper company to report earnings this quarter, so investors were looking at its results for signs of what’s to come. Shares of The New York Times Co., which reports earnings on Thursday, fell 40 cents, or 5.8 percent, to $6.55. The stock has lost a third of its value since the start of the year.
The McClatchy Co.’s stock fell 8 cents, or 4.8 percent, to $1.57. The stock has lost two-thirds of its value so far this year.
The Times Co. and McClatchy both declined comment on the stock movement.
Gannett did grow its digital revenue during the quarter, but it was “not enough to overcome what’s going on with the newspaper business,” Outsell Inc. media analyst Ken Doctor said. “And broadcast is flat.”
Gannett owns 23 television stations. Its broadcasting revenue dropped 6 percent to $174 million from $185 million in the same period a year ago, when the company benefited from political advertising ahead of the midterm elections.
Doctor said Gannett’s stock has traditionally been an “above average profit maker” in the sector.
“If they are challenged by so many of these factors … that does not reflect well on the rest of the sector,” he said.