Gannett Co., Inc. (NYSE: GCI) today reported non-GAAP earnings per diluted share of $0.49 for the first quarter, a 4.3 percent increase from $0.47 for the first quarter of 2014. The increase was driven by substantially better results in the Digital Segment due in part to the acquisition of Classified Ventures (Cars.com) and solid results in the Broadcasting Segment despite the absence of $51 million of Olympic and politically related spending that benefited the first quarter last year.
Gracia Martore, president and chief executive officer, said, “We’re off to a great start in 2015 with strong first quarter results and each of our businesses successfully executing on their strategic plans as we approach our separation into two publicly traded companies mid-year. Broadcasting continues to make strong progress as we continue to successfully integrate our newer stations and expand our digital and other revenue opportunities. In our Digital Segment, CareerBuilder and Cars.com continue to surpass expectations as they evolve and innovate to meet the dynamic needs of their customers. In Publishing, demand for our pioneering USA TODAY local content editions continues to escalate and we are leveraging this increasingly popular content by integrating it into third party news outlets, expanding our reach and gaining entry to new communities that value high-quality journalism.”
Martore continued, “With all three of our businesses gaining momentum, we are very well-positioned to complete the separation of our businesses later this year. We expect to complete the spin-off by mid-year, and look forward to the enhanced opportunities we expect the separation will create for both companies.”
On October 1, 2014, the company completed the acquisition of the 73 percent interest it did not already own in Classified Ventures LLC, which owns Cars.com. On December 29, 2014, the company announced that it sold Gannett Healthcare Group. The company also ceased operations of USA Weekend during the fourth quarter of 2014. Results for the first quarter of 2015 include the impact of all of these transactions.
Operating revenues in the first quarter were $1.5 billion compared to $1.4 billion in the first quarter of 2014, an increase of 4.9 percent year-over-year. Growth of 85.1 percent in Digital Segment revenues, helped by the acquisition of Cars.com and strong organic growth at both Cars.com and CareerBuilder, fueled the increase. Broadcasting Segment revenues were up 3.8 percent due to higher retransmission revenue offset, in part, by the absence of Olympic and political spending in the quarter. Publishing Segment revenues were 8.8 percent lower in the quarter reflecting, in part, the absence of $37 million of revenue associated with USA Weekend, Gannett Healthcare Group, Apartments.com and a commercial printing operation as well as a significant year-over-year decline in the UK exchange rate. On a pro forma, constant currency basis, Publishing Segment revenues were down 5.2 percent, a sequential improvement from fourth quarter 2014 year-over-year comparisons on the same basis.
Highlights for the quarter include the following:
*Earnings totaled $0.49 per diluted share on a GAAP and a non-GAAP basis, driven by strong Broadcast and Digital Segment results
*Overall company revenue growth of 5 percent, also driven by strong Broadcast and Digital Segment results
*Record first quarter Broadcasting Segment revenue increased 4 percent, more than overcoming the absence of $51 million of Olympic and political revenue that benefited the first quarter of 2014
*Record first quarter Digital Segment revenue increased 85 percent and 10 percent on a pro forma basis, on the strength of Cars.com and CareerBuilder performance
*Adjusted EBITDA rose 14 percent to $325 million on a year-over-year basis