Analysts Expect Gannett’s 3Q10 EPS to Rise
McLEAN, VA.: Shares of Gannett have gained 9 percent over the
last week in anticipation of the company’s third-quarter results reveal
tomorrow. The stock (NYSE: GCI) has gone from $12.45 Oct. 7 to rise above $14
today as analysts predict a double-digit boost in earnings per share.
Chicago-based Zacks Investment Research put the current consensus estimate for
the quarter at 49 cents earnings per share, or 11.4 percent growth over 3Q09. During
the second quarter of this year, Gannett posted EPS of 61 cents, surpassing
Zack’s estimate of 52 cents, and the 2Q09 result of 46 cents.
Zacks said its current consensus estimate has remained stable over the last
week, with none among six analysts revising their estimates. Gannett has topped
the Zacks consensus estimate over the last four quarters in the range of 14.3
to 22 percent, the firm said, meaning it outperformed the Zacks estimate
by an average of 17.3 percent in the last four quarters.
“Gannett is diversifying its business by adding new revenue streams to make it
less susceptible to economic conditions. The company is also streamlining its
cost structure, strengthening its balance sheet, and rebalancing its
portfolio,” Zacks said.
“Moreover, with advertisers gradually returning to the market, Gannett hinted
that the rate of fall in advertising revenue is decelerating. However, the
company’s high dependence on advertising revenue, which is hinges on the health
of the economy, remains a potential threat. Hence, we prefer to remain Neutral
at this juncture, given a sluggish economic recovery and a soft advertising
Zacks maintains a short-term hold recommendation on Gannett.
-- Deborah D. McAdams