Gannetts Reckoning – US-FOREX.US
Weak, weak, weak, that’s the outlook for media and advertising company Gannett, says JPMorgan Chase analyst Alexia Quadrani. She has a neutral rating on the stock as Gannett report earnings Wednesday.Though noting that Gannett Co.
is “one of the cheapest stocks in our universe,” Quadrani writes, “we see no positive near-term catalysts for GCI stock.” Quadrani also notes that Gannett has debt coming due and an underfunded pension plan and that it doesn’t look as if the global advertising markets that Gannett relies upon have even bottomed yet.Gannett’s golden digital property is CareerBuilder, a job search engine that loses some of its utility when companies are firing rather than hiring in most industries. As unemployment is expected to continue to climb well into next year and perhaps into 2011, Gannett can’t count on its Internet division to help it pull through.Gannett recently closed down some media properties such as the Detroit Free Press and forced employees to take unpaid furloughs, but, notes Quadrani, “ad revenues are still declining at a rapid pace, resulting in continued pressure on margins.”Quadrani notes that Gannett is the first newspaper company to report earnings. But most of Gannett’s peers have quite different businesses. The New York Times Co.
owns more prestigious papers including The New York Times and The Boston Globe, while News Corporation
has The Wall Street Journal but is also more of a cable and entertainment company than it is a newspaper conglomerate.With the outlook for Gannett’s stock bleak, attention will turn to the company’s debts. Its current liabilities are 1.5 billion against assets of 1.6 billion. Total debt, including long-term debt, is 4.3 billion.