Digital ads, acquisitions drive Gannett Q4 results
Gannett Co., which owns USA TODAY and 109 local news properties in the U.S., said Thursday its fourth-quarter profit rose nearly 21% as digital advertising sales rose, and acquisitions contributed to a 17% increase in revenue.
The McLean, Va.-based company reported fourth-quarter net income of $24.6 million, up from $20.4 million a year earlier. .
Earnings per share, on an adjusted basis, totaled 50 cents, compared to 53 cents in the October-December period a year ago, beating the 42 cents per share estimated by analysts polled by S&P Global Market Intelligence.
Total operating revenue rose 17.3% to $867 million, from $739.3 million a year ago. That beat analysts' expectations of $849 million.
"We're very pleased to have ended the year on such a high note with strong revenues and earnings in the fourth quarter," said Gannett CEO Robert Dickey in a conference call with analysts after the company released its financial results. "2016 was an important year in the transition of our business to a next-generation digitally-focused model."
Shares of Gannett (GCI) rose 4.1%, or 36 cents, to close at $9.06.
Total circulation revenue was $297.8 million, an increase of 15.5%. Total advertising revenue rose 6.1% to $445.2 million, up from $419.6 million a year ago.
Excluding revenue from acquisitions, foreign currency rate changes and some exited businesses -- operating revenue fell 7.7%. After adjusting for year-ago reclassification of certain customer credits, operating revenue declined 8.8%
Print advertising sales rose 3.6% to $334.4 million, while digital ad sales rose 14.4% to $110.8 million, helped by acquisitions, improved local sales and growth at USA TODAY, as well as increased mobile and video revenue.
"The success of our digital products and go-to market strategies such as focusing on native advertising through our Get Creative studio are more than offsetting declines in print advertising and to a lesser extent circulation revenues," Dickey said.
The USA TODAY Network hit a new all-time monthly high of more than 122 million unique visitors in November as a result of election coverage and wildfires in Tennessee, he said. The network ended 2016 as No. 3 in comScore Media Metrix's ranking of news and information digital media properties. "Our goal remains to be No. 1," Dickey said.
Digital-only subscriptions, sold by local news properties, grew 71.1%, with digital-only plus Sunday subscriptions surpassing 200,000 for the first time, a 62.4% increase.
During 2016, Gannett acquired the Journal Media Group, which includes the Milwaukee Journal Sentinel and 14 other newspapers; the North Jersey Media Group, which includes The Record of Bergen County; and ReachLocal, which helps local businesses manage sales leads and increase revenue.
For the current year, Gannett expects a mid-single digit increase in revenue and a slight decrease in earnings before interest, taxes and other items.
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.