Despite digital gains, Gannett sees a first quarter revenue decline of 7.2 percent

Gannett, the largest newspaper media company, is upping its game in digital marketing and seeing good growth as a result. But print advertising and circulation losses continue to drag down financial results.

The company reported a year-to-year revenue decline of 7.2 percent for the first quarter at properties it owned both this year and last. It operated at a small net loss of $400,000, essentially break-even on revenues of $723 million.

Print advertising was down 17.2 percent on a same store basis compared to the first quarter in 2017. Circulation revenues were down 5 percent, partly spurred by price increases that contributed to circulation numbers being down "in the mid-teens."

Like other print/digital companies, Gannett has a push on to build paid digital-only subscriptions, which grew 51 percent year-to-year to 382,000 at USA Today and the company's 109 regional properties.

CEO Bob Dickey talked up the growth potential in its digital marketing platform, Reach Local, especially in selling to regional companies that can be served by its geographic coverage.

In answer to an analyst's question during a conference call, Dickey said "the primary focus at this time" is on evaluating potential acquisitions and finding digital companies that will enhance Reach Local's offerings.

Only 18 months ago, Gannett was bidding to buy Tronc and making smaller newspaper company acquisitions. But newspapers no longer seem to be on the company's radar to judge by Dickey's comments.

Gannett reduced expenses by 7 percent year-to-year, helping to get to the break-even net margin. But the company cautioned that reductions that big will be hard to achieve in the second half of 2018, in part because of higher newsprint prices,

The results were somewhat better than analysts had been predicting, and Gannett shares were up 9.4 percent in midday trading.

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