MCLEAN, Virginia: America's largest newspaper publisher, The Gannett Company, and its UK counterpart Trinity Mirror Group, are languishing in the economic doldrums, according to reports from either side of the Atlantic. West of the pond, Gannett reported Wednesday a 36% slump in second-quarter profit as the decelerating US economy triggered a falloff in newspaper advertising revenue.
Gannett, which publishes 85 daily US newspapers including USA Today and owns twenty-three television stations, experienced a 14% fall in publishing ad revenue to $1.11 billion (€631.0m; £500.13m). Circulation income, however, held relatively firm with a downturn of just 2%.
Broadcasting, the lesser of Gannett's interests, fell 6%. Overall the firm's revenue dropped 10% to $1.72bn.
However, it continues to trade in the black, earning $233 million in the quarter, albeit a year-on-year plunge from $366 million. President/ceo Craig Dubow states the obvious: "The weakening economy had a dramatic impact on our results."Meantime, on the eastern shores of the Sea of Troubles, Britain's Trinity Mirror Group on Wednesday survived a crisis of confidence after issuing a statement to reassure investors it had no liquidity or borrowing problems.
This was in response to a collapse in its shares which went into freefall earlier that day, losing some 25% of their value in panic selling triggered by a haruspex who apparently 'misunderstood' the facts.
Jonathan Barratt at Kaupthing Securities reported that TM's latest overdraft facility had been sealed on more restrictive terms than earlier deals, under which the supporting banks could call-in the loan if debt exceeded 3.25 times underlying earnings.
This, responded TM, was inaccurate. In a 2pm statement the publisher declared "there has been no tightening of the financial covenants".
Its reassurance had a tranquilizing effect on the hysterical gamblers, reinvigorating shares which soared to end a rollercoaster day 13% up at £0.62.
Data sourced from Wall Street Journal Online and The Times (UK); additional content by WARC staff