Gannett Gives Upbeat 3Q View, Plans $400 Million Note Offering

   DOW JONES NEWSWIRES 
 

Gannett Co. (GCI) projected third-quarter earnings well above analysts' expectations as the nation's largest newspaper publisher announced plans to sell $400 million in five- and eight-year notes as it joins the raft of companies raising fresh capital to pay off other debt.

Shares climbed 13.1% premarket to $11.29. The stock through Monday was down 41% the past year.

Gannett projected earnings excluding restructuring charges of 39 cents to 42 cents a share on revenue of $1.31 to $1.32 billion. The mean estimates of analysts surveyed by Thomson Reuters were for earnings of 28 cents a share and revenue of $1.38 billion.

Chief Financial Officer Gracia Martore said publishing advertising continued to improve, with the year-over-year decline expected to improve from the one-third tumble seen in the first half of 2009. Specifics for the third quarter weren't provided.

Meanwhile, Gannett is targeting payment on its revolving credit line and a term loan with the capital raising. The company, which has been hit hard by the advertising slump and chaos in the newspaper industry, has worked to restructure its debt load, which fell $200 million during the quarter to $3.31 billion. Gannett has no debt maturities on the horizon for nearly two years.

In July, the publisher of USA Today, swung to a second-quarter profit amid aggressive cost cuts, but operating results continued to weaken sharply.

Gannett has been aggressively cutting costs in the past year or so, and last summer unveiled plans to cut an additional 1,400 jobs from its work force of 41,500. The company owns more than 80 daily newspapers, including USA Today.

-By Mike Barris and Kevin Kingsbury, Dow Jones Newswires; 212-416-2330; [e-mail]