Gannett Shows Strong Digital Growth, But Drop In Revenue

Gannett released its Q4 2018 earnings results yesterday, revealing a company in flux with reported loss in revenue, but a healthy digital business. 

The fourth-quarter 2018 consolidated results showed operating revenues at $751.4 million, compared to $854.2 million in Q4 of 2017.

Total digital revenues came in at $272.3 million, or around 36% of total revenue, while total digital advertising and marketing services revenue accounted for 48% of total advertising and marketing services revenues at $204.5 million.

Across its publishing segment, the company reported a decline in revenues of 9.8%, with $660 million reported compared to $764.8 million in Q4 of 2017.

However, some areas showed a marked increase. Digital marketing services revenues rose by 27.5% to $20.4 million, while digital media revenues increased by 2.3% to $78.2 million. According to the company, this growth was in part due to strong growth in national premium and programmatic revenues.

Perhaps the most surprising number was Gannett’s recorded growth in digital-only subscribers, up 46.3% year-over-year and totally 504,000.

Digital classified revenue fell by 12.9% to $16.4 million.

Publishing segment adjusted EBITDA was $116.6 million compared to $149.2 million the year prior.

The company’s Q4 report comes as MNG Enterprises or Digital First Media ramps up its attempt to takeover the enterprise. Yesterday, following the report’s release, MNG stated: “Gannett’s disappointing year-end earnings and guidance underscore MNG’s concerns about the health and direction of the business.

"Despite touting revenue gains in its digital assets, Gannett only partially disclosed the profitability of those assets and reaffirmed its interest in making additional digital acquisitions. It’s hard to fathom how the Gannett Board can continue to reject a premium, cash acquisition proposal when further declines and value destruction are on the horizon.”

Gannett nixed MNG’s initial offer, calling it “not credible.”

Recently, MNG, which owns 7.5% of Gannett, announced it would nominate a slate of candidates for election to Gannett’s board of directors to be voted on at the company’s annual meeting.

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