Gannett, owner of USA TODAY and more than 100 media properties, reported declining revenue in the second quarter, but continued to grow its digital readership.
The McLean, Va.-headquartered media company increased digital-only subscribers by 34% to 561,000.
However, revenue declined more than 9% to $660.3 million, falling short of the $689.9 million expected by analysts polled by S&P Global Market Intelligence.
Net income of $26.7 million rose 64% from $16.3 million a year ago, surpassing analysts’ expectations of $14.1 million. Net income included $6.5 million of after-tax restructuring, asset impairment charges, and other costs, offset by $32.8 million of gains on property sales.
Gannett reported earnings of 23 cents per share, compared to 14 cents in the same period a year ago, surpassing Wall Street expectations of 12 cents.
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Just prior to Gannett’s release of second-quarter earnings, the owner of GateHouse Media, New Media Investment Group said it would combine with Gannett to create the largest U.S. news publisher – with more than 260 daily news operations – and potentially the largest online destination of any U.S. news provider.
Gannett also said Paul Bascobert has been appointed the company’s president and CEO and a member of its board, effective immediately. Previously, the president of media tech company XO Group, Bascobert also led digital marketing firm Yodle’s local business’ sales, service, and marketing efforts. He had also formerly served as president of Bloomberg Businessweek and chief marketing officer at Dow Jones & Co. He replaces Robert Dickey who retired in May.
A “key milestone” reached by the Gannett in the quarter: 50% of advertising and marketing services revenue came from digital sources, said Barbara Wall, Gannett’s senior vice president, and interim chief operating officer and chief legal officer.
“Print advertising and circulation trends were stable in the quarter and we delivered sequential improvements in our client counts and retention within our digital marketing services business,” Wall said in a statement. “We believe we are well positioned to drive future growth within digital advertising and marketing services.”
Publishing revenues fell 13% to $576.2 million, while total advertising fell 14.9% to $285.9 million.
Gannett shares rose 2.7% to $11.04 Monday.
Shares of New Media Investment Group, the parent of GateHouse, fell 7% to $9.89.
New Media Investment Group also reported second-quarter results Monday. The company reported net income of $2.8 million as revenue rose 4% to $404.4 million. As did Gannett, New Media experienced revenue declines in print advertising, but digital revenue increased 12.2% to $51.2 million. The company also experienced growth in commercial print, distribution and events revenue of 9.7% in the period.
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.