Gannett in Asset Writedown After Earnings Plunge

03 February 2009

MCLEAN, Virginia: The Gannett Company is set to writedown the value of its assets, including 85 daily newspapers such as flagship title USA Today, by up to $5.9 billion (€4.6bn; £4.2bn), after its earnings fell by 36% in the last quarter of 2008.

Gannett's advertising revenues fell by 23% in the last quarter, with total revenues down by 8.5% to $1.7bn over the same period, and by 9% to $6.8bn for the year as a whole.

The company's quarterly net income also fell to $158 million from $245.3m in the year-ago period.

USA Today posted a drop off of 19% in ad revenues in the fourth quarter, following on from an 8% decline in the first nine months of the year.

Advertising expenditure through its community titles was also by down 31%, as part of a broader decline in classified revenues.

According to Craig Dubow, president/ceo of Gannett, the results "reflect the unprecedented turmoil in the economies of both the U.S. and the UK and in the financial markets".

While this also required the writedown in the value of the company's assets, Dubow said the company would still be able to pay its debts.

Data sourced from Wall Street Journal Online; additional content by WARC staff