Gannett (GCI, Financial) recently announced strong results for the third quarter of 2014. It reported a 15.2% increase in its third-quarter net operating revenue to $1.44 billion. It also reported non-GAAP diluted earnings per share of $0.59, an increase of 37.2% from $0.43 during the same period last year. Gannett looks positioned to continue delivering strong growth.Ă‚
A closer look at the growth drivers
The Broadcasting segment of Gannett Co. demonstrated excellent third quarter performance and achieved record levels of revenue, primarily driven by the expansion of its television stations, which includes the acquisition from London and Belo broadcasting.
Gannett saw solid ad demand related to politics, indicating robust footprint coupled with superb inventory management and established stations.
Gannett's political footprint is expanding to cover major gubernatorial and Senate races in the states of North Carolina, Michigan, Louisiana, Georgia, Florida, Colorado and Arkansas. Gannett stations are also broadcasting 10 dynamic House races in cities that include San Antonio, St. Louis, Denver and Phoenix.
Gannett’s superior system for handling these exceptions and the crucial position of its stations in their individual markets provides it with a competitive advantage of having primary capability for every broadcasting business.
Focus on USA Today
Gannett owns USA Today, a daily newspaper that offers content for free online which enables it to retain a major base of print customers. USA Today has achieved a significant increase in circulation through its "Butterfly" program for generating features circulated to other newspapers.
USA Today also boasts of 1.4 million "digital non-replica" circulation representing the number of readers reading its free publication on mobile apps.
Gannett exceeded the reader’s expectations by introducing USA Today to local papers. First, this has improved the overall current subscriber satisfaction and impression by enhancing upon the layout, look and feel, content and quality.
Second, the inclusion of sections of USA Today has increased the reader’s engagement time with the newspaper.
Finally, more than half of subscribers seem to expect that the product has gained more value currently by including USA Today and several local content enhancements, which has further increased the possibility of renewing their subscriptions.
The digital marketing services segment continues to gain from its extended scale and is comfortably entering into the markets already acquired that includes those to which access was gained through its widespread television footprint.
In addition, G/O Digital serves major brands and retailers and continues to witness solid traction across many crucial areas. For instance, Gannett’s mobile shopping app Key Ring released Key Ring Express during the quarter, offering weekly sale ads, coupons and curating loyalty cards. Users can also receive notifications through Key Ring Express powered by GeoSense and Beacon’s locations locally within 100 meters of their location.
More moves
Gannett also concluded its acquisition of Cars.com on October 1. The website is believed to have an extraordinary product suite and sharp ability to cater to its customers and offer superior innovations capabilities.
Gannett has decided to split into two publicly-traded companies, one focusing on its publishing business and rapidly-growing digital components, while the second will focus on broadcast.
Conclusion
Considering all facts, it is clear that Gannett has been focusing on the correct areas to deliver growth. This is the reason why investors should remain invested in this stock for the long run.
