AP
Newspapers fall on deeper cost-cutting measures
Friday January 30, 6:47 pm ET
Newspaper stocks fall on Gannett write-down, Belo job cuts, Media General dividend suspension
SAN FRANCISCO (AP) -- Newspaper stocks plunged Friday as several major publishers revealed deeper cost-cutting measures amid an exodus of advertising dollars to the Web and the recession's worsening of the industry's serious financial problems.
USA Today publisher Gannett Co.'s shares plunged 16 percent. The nation's largest newspaper publisher said its fourth-quarter net income fell 36 percent to $158 million. The company warned that even those profits would be wiped out once it takes as much as $5.9 billion in pretax write-downs to account for the falling value of its businesses. Gannett also said its board would explore a dividend cut in a move to conserve cash.
Like other newspapers, Gannett is hurting from a migration of advertising from the printed page to the Internet, a trend that has forced big layoffs. Last year, the McLean, Va.-based company cut the work force at most of its U.S. newspapers by 10 percent.
Gannett blamed the massive write-down on the company's falling stock price and the recession's vaporizing of advertising demand. Gannett's quarterly advertising revenue for its publishing businesses fell 22.7 percent.
The stock fell $1.13 to close at $5.77.
Shares of Media General Inc., which publishes the Richmond Times-Dispatch, The Tampa Tribune and the Winston-Salem Journal, fell 21 cents, or 9.7 percent, to $1.95, after the company announced plans to suspend its dividend.
The announcement came as Media General reported that it swung to a loss of $85.5 million in the fourth quarter, while sales fell 12 percent to $207 million
The company said its decision to suspend dividends on its Class A and Class B shares will help direct cash to reducing debt. The company has already laid off hundreds of workers, suspended profit-sharing and executive bonuses, and plans to halt contributions to workers' 401(k) accounts.
Shares of publisher A.H. Belo Corp., whose papers include The Dallas Morning News and The Providence Journal in Rhode Island, slipped nearly 4 percent after the company announced plans to lay off 500 more workers, or 14 percent of its staff. A.H. Belo had about 3,460 workers, including full- and part-timers, at the end of September.
Last year, the company cut 90 workers in one round of layoffs and 500 jobs in another round through voluntary severance offers.
A.H. Belo was spun off last February from Belo Corp., which owns and operates television stations.
A.H. Belo's stock fell 8 cents, or 3.9 percent, to close at $2.
Lee Enterprises Inc.'s stock was off 5 cents, or 13.9 percent, to close at 31 cents after the company announced that it has received a waiver of "covenant conditions" on $306 million of its debt, which means the company isn't at immediate risk of being default on the terms of that contract. The waiver has been extended until Feb. 6.
Newspapers fall on deeper cost-cutting measures
Friday January 30, 6:47 pm ET
Newspaper stocks fall on Gannett write-down, Belo job cuts, Media General dividend suspension
SAN FRANCISCO (AP) -- Newspaper stocks plunged Friday as several major publishers revealed deeper cost-cutting measures amid an exodus of advertising dollars to the Web and the recession's worsening of the industry's serious financial problems.
USA Today publisher Gannett Co.'s shares plunged 16 percent. The nation's largest newspaper publisher said its fourth-quarter net income fell 36 percent to $158 million. The company warned that even those profits would be wiped out once it takes as much as $5.9 billion in pretax write-downs to account for the falling value of its businesses. Gannett also said its board would explore a dividend cut in a move to conserve cash.
Like other newspapers, Gannett is hurting from a migration of advertising from the printed page to the Internet, a trend that has forced big layoffs. Last year, the McLean, Va.-based company cut the work force at most of its U.S. newspapers by 10 percent.
Gannett blamed the massive write-down on the company's falling stock price and the recession's vaporizing of advertising demand. Gannett's quarterly advertising revenue for its publishing businesses fell 22.7 percent.
The stock fell $1.13 to close at $5.77.
Shares of Media General Inc., which publishes the Richmond Times-Dispatch, The Tampa Tribune and the Winston-Salem Journal, fell 21 cents, or 9.7 percent, to $1.95, after the company announced plans to suspend its dividend.
The announcement came as Media General reported that it swung to a loss of $85.5 million in the fourth quarter, while sales fell 12 percent to $207 million
The company said its decision to suspend dividends on its Class A and Class B shares will help direct cash to reducing debt. The company has already laid off hundreds of workers, suspended profit-sharing and executive bonuses, and plans to halt contributions to workers' 401(k) accounts.
Shares of publisher A.H. Belo Corp., whose papers include The Dallas Morning News and The Providence Journal in Rhode Island, slipped nearly 4 percent after the company announced plans to lay off 500 more workers, or 14 percent of its staff. A.H. Belo had about 3,460 workers, including full- and part-timers, at the end of September.
Last year, the company cut 90 workers in one round of layoffs and 500 jobs in another round through voluntary severance offers.
A.H. Belo was spun off last February from Belo Corp., which owns and operates television stations.
A.H. Belo's stock fell 8 cents, or 3.9 percent, to close at $2.
Lee Enterprises Inc.'s stock was off 5 cents, or 13.9 percent, to close at 31 cents after the company announced that it has received a waiver of "covenant conditions" on $306 million of its debt, which means the company isn't at immediate risk of being default on the terms of that contract. The waiver has been extended until Feb. 6.
