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Gannett (GCI) Down 4.7% Since Earnings Report: Can It Rebound? (Revised)
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It has been about a month since the last earnings report for Gannett (GCI - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Gannett Q4 Earnings Beat Estimates, Decline Y-o-Y
Gannett posted adjusted quarterly earnings of 50 cents a share that beat the Zacks Consensus Estimate of 37 cents but declined 5.7% from 53 cents reported in the year-ago quarter. Higher operating expenses adversely impacted the bottom line.
On a GAAP basis, the company reported earnings of 21 cents a share, up from 17 cents reported in the prior-year quarter.
Gannett reported total revenue of $867 million in the quarter, up 17.3% from the prior-year quarter, and came ahead of the Zacks Consensus Estimate of $847 million.
The increase in revenue came on the back of the buyout of Journal Media Group, Inc., North Jersey Media Group and ReachLocal, and sustained improvement witnessed in national digital advertising revenue. This was partly offset by fall in print advertising and circulation demand.
However, excluding the impact on revenues from buyouts, foreign currency translations and selected exited operations, total revenue declined 7.7% from the year-ago period. Management hinted that national digital advertising revenue soared 19.1%, whereas digital-only subscriptions advanced 71.1%.
Shares of this McLean, VA-based company were up roughly 8% during pre-market trading hours. However, we noticed that in the past six months, the stock has declined 25.4% compared with the Zacks categorized Publishing-Newspapers industry that fell marginally by 0.7%.
Advertising revenue increased 22.4% to $513.7 million, whereas circulation revenue jumped 15.5% to $297.8 million. Other operating revenue fell 10.6% to $55.5 million.
Adjusted EBITDA inched up 0.5% to $127 million, however, adjusted EBITDA margin contracted 240 basis points to 14.7%.
Segment Details
Publishing revenue came in at $790.4 million, up 7.5% from the prior year quarter. Excluding unfavorable foreign currency translation and selected exited operations, revenue advanced 10.7%. The increase in revenue was driven by incremental revenue from Jersey Media Group and the North Jersey Media Group, 1.4% jump in organic USA TODAY revenue and improved digital performance in local U.S. markets. This was partly offset by a 15.3% decline in print advertising in the U.S. and a 14.2% fall in print advertising in the U.K. Digital advertising revenue increased 14.4% to $110.8 million during the quarter.
ReachLocal segment revenue came in at $75.2 million during the quarter. In the second quarter, Gannett will start introducing ReachLocal in several markets.
How Have Estimates Been Moving Since Then?
The Zacks consensus Estimate for the current year has revised 3.2% downward with two estimates moving lower over the last 30 days.
VGM Scores
Currently, Gannett's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable for value and growth investors.
Outlook
The stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.
(We are reissuing this article to correct a mistake. The original article, issued on Mar 14, 2017, should no longer be relied upon.)
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Gannett (GCI) Down 4.7% Since Earnings Report: Can It Rebound? (Revised)
It has been about a month since the last earnings report for Gannett (GCI - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Gannett Q4 Earnings Beat Estimates, Decline Y-o-Y
Gannett posted adjusted quarterly earnings of 50 cents a share that beat the Zacks Consensus Estimate of 37 cents but declined 5.7% from 53 cents reported in the year-ago quarter. Higher operating expenses adversely impacted the bottom line.
On a GAAP basis, the company reported earnings of 21 cents a share, up from 17 cents reported in the prior-year quarter.
Gannett reported total revenue of $867 million in the quarter, up 17.3% from the prior-year quarter, and came ahead of the Zacks Consensus Estimate of $847 million.
The increase in revenue came on the back of the buyout of Journal Media Group, Inc., North Jersey Media Group and ReachLocal, and sustained improvement witnessed in national digital advertising revenue. This was partly offset by fall in print advertising and circulation demand.
However, excluding the impact on revenues from buyouts, foreign currency translations and selected exited operations, total revenue declined 7.7% from the year-ago period. Management hinted that national digital advertising revenue soared 19.1%, whereas digital-only subscriptions advanced 71.1%.
Shares of this McLean, VA-based company were up roughly 8% during pre-market trading hours. However, we noticed that in the past six months, the stock has declined 25.4% compared with the Zacks categorized Publishing-Newspapers industry that fell marginally by 0.7%.
Advertising revenue increased 22.4% to $513.7 million, whereas circulation revenue jumped 15.5% to $297.8 million. Other operating revenue fell 10.6% to $55.5 million.
Adjusted EBITDA inched up 0.5% to $127 million, however, adjusted EBITDA margin contracted 240 basis points to 14.7%.
Segment Details
Publishing revenue came in at $790.4 million, up 7.5% from the prior year quarter. Excluding unfavorable foreign currency translation and selected exited operations, revenue advanced 10.7%. The increase in revenue was driven by incremental revenue from Jersey Media Group and the North Jersey Media Group, 1.4% jump in organic USA TODAY revenue and improved digital performance in local U.S. markets. This was partly offset by a 15.3% decline in print advertising in the U.S. and a 14.2% fall in print advertising in the U.K. Digital advertising revenue increased 14.4% to $110.8 million during the quarter.
ReachLocal segment revenue came in at $75.2 million during the quarter. In the second quarter, Gannett will start introducing ReachLocal in several markets.
How Have Estimates Been Moving Since Then?
The Zacks consensus Estimate for the current year has revised 3.2% downward with two estimates moving lower over the last 30 days.
VGM Scores
Currently, Gannett's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable for value and growth investors.
Outlook
The stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.
(We are reissuing this article to correct a mistake. The original article, issued on Mar 14, 2017, should no longer be relied upon.)