Gannett Co Inc Earnings Call Nuggets: Print and Telecom Weakness, Outlook

On Monday, Gannett Co Inc (NYSE:GCI) reported its first quarter earnings and discussed the following topics in its earnings conference call. Take a look.

Print and Telecom Weakness

John Janedis – UBS: You said weakness in telecom and entertainment and national print. I think it seems like the industry also saw some weakness for those categories in the quarter as well. Can I just ask, your sense that the categories, I mean in those two have made a strategic decision to spend away from print and other media platforms this year?

Gracia C. Martore – President and CEO: John, I don’t think it’s that they’re choosing to spend away from print as much as it’s that the sum of the competitive pricing wars and other issues that drove a lot of telecom spending have abated a bit. When we look at for instance our television numbers in the first quarter, we also see that telecom was a lagging category for them in a sea of fairly strong other categories. So I don’t think it’s just a print issue, I think it’s more a moment in time for the telecom companies as they have a different strategy around how they are pursuing growth.

John Janedis – UBS: Okay, and entertainment I guess Gracia that’s what I see movies for USA TODAY, that’s correct, right?

Gracia C. Martore – President and CEO: Yeah, exactly. On the entertainment side, USA TODAY simply doesn’t get the level of movie advertising that newspapers for instance in LA or New York get from that category.

John Janedis – UBS: Just quickly on CareerBuilder. What were the North American revenues, for the quarter I guess solely and within the Digital segment, I think, if you back into the numbers, it looks like non-CareerBuilder was kind of flattish. Can you talk about what you’re seeing there within the segments, ex-CareerBuilder?

Gracia C. Martore – President and CEO: Sure. On North American revenues, I believe that the network North American revenues were up about 7% in the quarter. International revenues obviously were much stronger. I think, up in the 35% or so percentage range. And obviously, CareerBuilder drove a lot of the growth that we saw in the digital segments, ShopLocal also had a pretty good quarter as well.

Outlook

Alexia Quadrani – JPMorgan: Just a question on your outlook for the second quarter. First on the publishing side, any comments you can give us on how April is trending in print, and then on your broadcasting guidance in terms of pacing, I think, it implies that we may see some softening in core in Q2 just given what we’ve expecting political and retrans, is that what you’re suggesting as well?

Gracia C. Martore – President and CEO: Well, let me just kind of overall comment about the outlook for the second quarter. Overall, as we indicated, our advertising comparisons got much better as the first quarter went on, and like many others, I think, January was a slow month, but clearly we accelerated through February and March, and as I said earlier, our average for February and March was better than what we did in the fourth quarter. So, starting out of the block, we currently anticipate that the second quarter will be much more like the way we ended the first quarter rather than the sluggishness that we obviously saw in January. On the television side I don’t think that our guidance is implying that core business will be a little softer, obviously we don’t have the Super Bowl which helped a little bit in the first quarter on our NBC affiliates. Political I think we’ll see how that all plays out, but I don’t think we are looking for heroic political numbers in the second quarter frankly as we mentioned about 80% of our political dollars are garnered between Labor Day and Election Day, so usually the first and second quarters are not a significant political opportunity. So I think our core businesses hanging in there quite well. I look at auto and auto pacing I think were up in the 20% plus range for broadcasting obviously a little bit of that is in comparison to last year’s second quarter when we had towards the end of the quarter the impact of the Japanese tsunami, but we also had absent the auto side up revenues in broadcasting last year in the second quarter. So in no way that guidance implies that we expect core revenues to be softer I think. Frankly where we sit today we only really have good pacing for April and into May I think June We’ll have to see. I think Dave Lucci when we talked to him he thinks that there is potential for some upside to the June pacing’s that we’re obviously having just very early glimpses on right at the moment. Newsquest I think will continue to do a good job and continue to outpace their regional competition in the U.K. So overall I’d say the comment is again that the second quarter is running out and we expect it to be much more like the way we finished the first quarter than the January aberration.

Alexia Quadrani – JPMorgan: Then can I just clarify something that I think you mentioned about your strategic growth initiatives, I may have misheard it. But should we assume, was the comment earlier that we should assume that we should start seeing positive circulation revenue growth at year-end, was that right or did I mishear that?

Gracia C. Martore – President and CEO: Go ahead Bob.

Robert J. Dickey – President, U.S. Community Publishing: That would be the expectation yes, as we roll out throughout the end of September. So, by that point in time, some of our sites will have been out as long six months. So, yes, we would expect fourth quarter.

Gracia C. Martore – President and CEO: Again you have recall that some of our subscriptions obviously are three months, six months, year subscriptions, so it will take time for those dollars to fully be realized, but I think as we said in February, we expect that the bottom line impact from the content subscription model should be a favorable about $100 million in full year 2013?