Gannett Co. Inc. (GCI, Financial) is an international media and marketing solutions company and one of the largest, most geographically diverse local media companies in the U.S. Gannett’s iconic national brands, such as USA TODAY and CareerBuilder, as well as its unique local brands serving 112 communities, set the company apart and provide a strong brand advantage.
Solid First Quarter Earnings
Non-GAAP earnings
The first quarter of 2015 witnessed non-GAAP earnings per diluted share of $0.49. This was a 4.3% increase from first quarter of 2015. Net income on a non-GAAP basis was $112.8 million in the first quarter, an increase of 4% compared to the first quarter in 2014. Operating income on the same basis was 7.5 percent higher and totaled $243.7 million, due primarily to a significant increase in profitability in the Digital Segment and the strong performance of the company's television station portfolio, despite very difficult year-over-year comparisons.
Digital Segment revenue
This segment saw an increase of 85% and 10 percent on a pro forma basis. This is attributable to the acquisition of Cars.com and strong organic growth at both Cars.com and CareerBuilder. Pro forma digital revenues company-wide, including the Digital Segment and all digital revenues generated by the other business segments, were 7.2 percent higher and totaled $513.1 million. The increase reflects higher affiliate fees at Cars.com as well as higher revenue associated with CareerBuilder, digital marketing solutions products and digital advertising.
Broadcasting Segment revenue
Revenue from broadcasting segment increased 3.8%. In the first quarter of 2015, broadcasting revenues were $396.8 million which was an increase when compared to $382.3 million in the first quarter in 2014.
Publishing Segment Revenues
Revenues from publishing segment saw a decline 8.8 percent. In this quarter it was about $768.2 million, which was a decrease when compared to $842.1 million in the first quarter of 2014.
Overall Revenue
There was a 5% growth in the overall revenues of the company.
Adjusted EBITDA
Adjusted EBITDA increased by 14% and stood at $325 million on a y-o-y basis.
Operating Revenues
Operating revenues in the first quarter, 2015 were $1.5 billion. This was an increase when compared to $1.4 billion in the first quarter of 2014.
Operating Expenses
Operating expenses including special charges totaled at $1.24 billion. Operating expenses increased from $1.20 billion in the first quarter of 2014.
Non-Operating Items
Interest expense during the quarter increased from the first quarter of 2014 and was $70.8 million (it was $69.6 million in the first quarter of 2014). Net cash flow from operating activities was $145.5 million in the quarter. Free cashflows were at $129.2 million. Total cash and cash equivalents were at $135.7 million. Long-term debt outstanding was $4.35 billion.
To End
Through its powerful network of broadcast, digital, mobile and print products, the company informs and engages more than 110 million people every month. Overall, Gannett reaches more than 65 million unique visitors monthly or about 29 percent of the U.S. Gannett’s properties cover a wide range of geographies, demographics and content areas, which combine to form a uniquely powerful and comprehensive portfolio of offerings for consumers and commercial clients alike.
The company announced recently that it has chosen TEGNA as the name for the new Broadcasting and Digital company. Gannett is in the process of creating two publicly traded companies: one exclusively focused on its Broadcasting and Digital businesses, and the other on its Publishing business and affiliated digital assets. The CEO of the company seemed to be quite contented with the company’s performance and said, “we’re off to a great start in 2015 with strong first quarter results and each of our businesses successfully executing on their strategic plans as we approach our separation into two publicly traded companies mid-year.”
GCI recently won 72 Regional Edward R. Murrow Awards across Broadcast and U.S. Community Publishing, including six for overall excellence, the highest award given. Gannett won more awards than any other media organization and the most in its history.
This company posted nice first quarter results and is expected to create shareholder returns in the near future. The company has witnessed increase in revenues in almost every segment and is expected to continue to do so in the near future also. The company has strong fundamentals. I am quite bullish about this company and investors may add this company to their portfolio.
(Source: Company's Website)
