• by February 7, 2002

Gannett Co., publisher of USA Today and 94 other daily newspapers, said Thursday its fourth-quarter earnings fell 16% amid the industry-wide advertising slowdown.

Gannett said quarterly profits fell to $248.4 million, or 93 cents per share, from $294.9 million, or $1.11 a share, in the year-earlier period.

Analysts on average expected earnings of 92 cents a share, with a range of 90 cents to 94 cents per share, according to research firm Thomson Financial/First Call.

The company said in December it expected earnings to be in a range of 90 cents to 93 cents a share. At the time, it projected a recovery in the economy in the second half of 2002 with ad revenues flat to slightly higher for the year.

Shares rose 45 cents to $66.96 in early trading on the New York Stock Exchange.

Revenues fell 14.3%, to $1.62 billion from $1.89 billion. USA Today's fourth-quarter ad revenues fell 29% on a 30% decline in pages.

The entire newspaper industry has been suffering under the worst advertising market in years, particularly in the national and help-wanted categories.

The company said that December newspaper ad revenues declined 24% on a 19% decline in volume, although the company noted that Dec. 2001 covers a four-week period compared with a five-week period last year.

Excluding that week, overall newspaper ad volumes declined 3%, but classified advertising rose 2%.

"The 2% increase in classified advertising is something of a ray of hope for the company," said J.P. Morgan analyst Barton Crockett. "It remains to be seen if this is evidence of a turnaround."

Another positive for the company, Crockett said, is television advertising revenues in the first quarter, which will benefit from the Winter Olympics. Thirteen of Gannett's 22 TV stations are affiliated with NBC, the network broadcasting the Olympics.

Shares of Gannett have underperformed the Standard & Poor's newspaper publisher index by about 7.3% over the past year.

- Reuters