Gannett reports rebound as digital subscription strategy gains steam

Gannett reports rebound as digital subscription strategy gains steam

Gannett on Tuesday announced better-than-expected fourth-quarter revenue and adjusted earnings, showing what it called a "rebound" as the company's digital subscription strategy gains momentum.

The release of preliminary fourth-quarter estimates comes as Gannett has enjoyed a jolt to its stock price in recent months. The company's shares, which have more than tripled since November, closed up 5.5% to $4.19 on Tuesday.

The company estimated fourth-quarter revenue of $865 million to $875 million, a net loss before taxes of $130 million to $135 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of $142 million to $147 million.

Analysts had estimated revenue of $857 million and adjusted EBITDA of $93 million, according to S&P Global Market Intelligence.

In the fourth quarter of 2019, Gannett's revenue and adjusted EBITDA were $1.05 billion and $141 million, respectively.

Gannett Chairman and CEO Michael Reed said in a statement that the company enjoyed a "strong" performance "primarily driven by a continued rebound in our advertising trends, both print and digital."

Fourth-quarter digital circulation revenue rose about 46% compared with a year earlier.

Reed said at an investment conference last week that the company has set a goal of securing 10 million digital subscriptions within five years.

The company surpassed the 1 million mark in the third quarter of 2020, marking a 31% increase from the same period in 2019. Online subscriptions are viewed as crucial to the success of media companies in the digital age as newspaper dollars decline.

Gannett is in the midst of transitioning to what Reed has called a subscription-led business model. Historically, Gannett has relied mostly on revenue from advertising, print subscriptions and marketing services.

Gannett CEO:Gannett aiming for 10 million digital subscriptions within five years

Gannett debt reduction: USA TODAY owner refinances $500M in cost-savings move

A debt refinancing deal announced in November has also bolstered Gannett's balance sheet, leading to a reduction in annual interest expenses of $48 million, the company said Tuesday.

Gannett has said it plans to refinance the remaining amount of a $1.8 billion loan from private equity firm Apollo Global Management that enabled the 2019 merger of New Media Investment Group and the company previously known as Gannett. The new entity took on the Gannett name and headquarters.

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