UPDATE 2-Gannett Q3 revenue falls on newspaper weakness
Oct 21 (Reuters) - Gannett Co Inc, the largest U.S. newspaper chain, reported a 4 percent drop in third-quarter revenue on Monday because of a decline in advertising sales, mainly at its papers.
Publishing revenue fell to $858.1 million on a 6 percent slide in advertising revenue. Circulation revenue dipped 0.6 percent. Gannett, whose properties include USA Today, started charging for digital content a year ago at its U.S. newspapers.
Total revenue fell to $1.25 billion versus analysts' estimates of $1.27 billion.
Shares of Gannett were off 5 percent to $26.11 in morning trade.
"It's a mixed bag," Doug Arthur, an analyst at Evercore, said about the overall results.
Arthur said the publishing division looked "weak" and that the slip in circulation revenue was "one cause for concern."
Still, he noted that investors have their eyes on next year, when Gannett should benefit from an expansion in TV stations. Gannett has been making a big push into broadcasting to increase profit margins.
The company nearly doubled its broadcast holdings to 43 station from 23 with its agreement to buy Belo Corp for $1.5 billion. Belo shareholders approved the transaction in the third quarter, and Gannett is waiting for government approval before the deal closes.
Broadcast revenue currently makes up 16 percent of the total, while publishing represents 63 percent.
At Gannett's broadcast TV station divisions, total revenue fell 15 percent to $198.5 million because of the absence of Olympic or political advertising recorded in the third quarter last year.
Net income for the quarter totaled $79.7 million, or 34 cents per share, compared with $133.1 million, or 56 cents per share, for the same quarter last year.
Adjusted for special items, earnings per share was 43 cents, ahead of analysts average expectations of 41 cents per share, according to Thomson Reuters I/B/E/S.