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Friday April 27, 2012
Gannett: Contrarian pick on print profits
by Amy Calistri, editor The Daily Paycheck Gannett (GCI) -- the newspaper and media company -- is a riskier investment than I tend to recommend and is suitable for more aggressive investors. However, if Gannett can successfully navigate its way back to growth, the return will be well worth the risk. I recently featured this as a contrarian play, noting that other interested investors may want to wait until after the pending earnings report to buy. I feared that even if Gannett's first-quarter results beat Wall Street analysts' expectations, a quarter without earnings growth could still weigh on the shares. And that is, indeed, what happened. On April 15, Gannett announced it had earned $0.34 per share, more than the $0.31 per share analysts had expected. Broadcasting revenues rose 7.5% and its digital division grew 6.8% in the quarter compared with the same period last year. But, as expected, the revenues from the company's newspaper division continued to slip, dropping 6% from last year's first quarter. On April 23, Gannett hired Jeremy Gaines to take over corporate communications. Gaines is a communications veteran, having overseen the rise of the cable channel MSNBC where he worked as the top spokesman for the last 14 years. Personally, I was pleased to see Gannett invest in a resource with a proven track record in broadcasting, one of the company's key avenues for growth. Action to Take --> Turnaround stories are always risky and the doubters are many. Gannett will be haunted with the tagline "print is dead" for quarters to come -- even as it demonstrates growth in its other business units. GCI has inherent turnaround risks. Nevertheless, I am going to take advantage of the recent price pullback to pick up shares. Learn more about this financial newsletter at Amy Calistri's The Daily Paycheck. Related articles: 
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