Why Gannett's Stock Dived by 15% on Thursday
Media company Gannett (NYSE: GCI) published its latest set of quarterly figures before market open Thursday. Perhaps, though, this was one news item it might have preferred to spike -- the company fell short of analyst estimates on both its trailing results and on its guidance. As a result, its share price closed the day more than 15% lower, while the S&P 500 index was in positive territory with a 1.9% gain.
The third quarter's headline figures missed estimates
For its third quarter, Gannett earned just under $653 million in revenue. This was 9% below the figure in the same period of 2022. Of that, the company's digital properties brought in nearly $264 million to constitute 40% of the total. Meanwhile, the company's attributable net loss narrowed significantly to just under $2.6 million ($0.02 per share) from the year-ago deficit of more than $54 million.
Neither headline figure met analyst expectations. Collectively, the pundits tracking the stock were anticipating just over $660 million on the top line and a narrower per-share loss of $0.01.
In the earnings release, Gannett alluded to a "challenging" environment for its advertising clients -- a crucial revenue source for the company. Nevertheless, it quoted CEO Michael Reed as saying that the company feels its current strategy "will result in long-term sustainable revenue and profit growth, along with much lower debt levels."
Full-year revenue guidance was also found wanting
Gannett also proffered full-year guidance that was below analyst projections. It believes that it will earn $2.65 billion to $2.67 billion in revenue, which is below both the $2.95 billion of 2022 and the average prognosticator estimate of $2.72 billion. It provided a very wide range for the bottom-line result, which could be anywhere from a loss of $20 million to breakeven. The 2022 net loss was $78 million.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
