• Editor & Publisher, Friday, July 10, 2009 12:14 AM

Gannett should not expect a turnaround in the second quarter, say J.P. Morgan analysts Alexia Quadrani and Monica DiCenso. They forecast that newspaper advertising revenue at Gannett fell 32% in Q2. "Severe revenue declines" are expected at the flagship USA Today.

"Advertisers and local media operators remain very cautious about local ad spending, leading us to believe that we may not have reached a bottom," the analysts say. Despite Gannett's efforts at cost cutting, ad revenues are dropping at such a rapid pace it won't alleviate margin pressure.

"Weakness at Gannett will set the tone for another depressing reporting season in the newspaper universe," says the analysts' report. They are maintaining a "neutral" rating on the company due to no near-term catalysts to boost shares.

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