Gannett Co. reported a 33 percent drop in its fourth-quarter net income Monday. The media company, which publishes USA Today and owns a network of broadcast, digital and other publishing properties, said profits were weighed down by restructuring costs and other charges, as well as a revenue decline.
The company earned $116.9 million, or 49 cents per share, in the three months that ended Dec. 25. That’s down from earnings of $174.1 million, or 72 cents per share, in the same period a year earlier.
Gannett’s stock fell 7 percent, or $1.07 to $14.15 in midday trading on Monday. It has traded in between $8.28 and $18.93 in the past 52 weeks.
Excluding special items such as restructuring charges, Gannett earned 72 cents per share in the latest quarter. Analysts, on average, were expecting earnings of 68 cents per share, according to a poll by FactSet.
The company said its results reflected $63.6 million in charges related to workforce restructuring and facility consolidations at properties in the U.S. and the U.K. The largest charge was associated with the transfer of production of The Cincinnati Enquirer to a newspaper printer in Columbus, Ohio.
Revenue fell 5 percent to $1.39 billion from $1.46 billion in the same period a year earlier.
Analysts were expecting revenue of $1.39 billion, according to a poll by FactSet.
“We are positioning for growth in print and digital media through new subscription models delivered across platforms, capturing opportunities in adjacent businesses, and continuing to focus on operational efficiencies,” said Gracia Martore, president and CEO, in a statement business cards design.
Revenue at Gannett’s publishing division fell 5 percent to $1.01 billion, a decline the company attributed to lower advertising amid the economic softness in the U.S. and the U.K.
Broadcasting revenue fell 14 percent to $199.8 million, due mainly to sharply lower political advertising than a year earlier.
Revenue at the company’s digital division, which includes the website CareerBuilder, rose 9 percent to $181.5 million.
Company-wide digital revenue, which consists of the digital division and revenue generated by newspaper websites, rose nearly 7 percent to $290.3 million.
For the full year, Gannett earned $458.7 million, or $1.89 per share, down 22 percent from $588.2 million, or $2.43 per share, in the previous year.
Adjusted earnings were $2.13 per share.
Revenue slid 4 percent to $5.24 billion from $5.44 billion.
Analysts were expecting full-year adjusted earnings of $2.10 per share on revenue of $5.25 billion.
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The captain of a cruise liner that ran aground and capsized off the Tuscan coast faced accusations from authorities and passengers that he abandoned ship before everyone was safely evacuated as rescuers found another body on the overturned vessel.
The male passenger was found in a corridor of the part of the Costa Concordia still above water, fire department spokesman Luca Cari told state radio. The victim was wearing a life-vest. Six bodies have now been recovered, while 16 people are unaccounted-for after the luxury liner struck rocks or a reef off the tiny island of Giglio.
The number of unaccounted-for was raised after relatives of two Sicilian women who had been listed among those safely evacuated after Friday night’s grounding told authorities they not heard from them.
The search of the ship, including a risky inspection of the underwater half of the capsized ship, was continuing Monday, in rough seas.
On Sunday, divers searching the murky depths of the ship found the bodies of two elderly men. Three other bodies were found in the hours after the accident.
Still, there were glimmers of hope: The rescue of three survivors _ a young South Korean couple on their honeymoon and a crew member brought to shore in a dramatic airlift some 36 hours after the grounding late Friday.
Meanwhile, attention focused on the captain, who was spotted by Coast Guard officials and passengers fleeing the scene even as the chaotic and terrifying evacuation was under way.
The ship’s Italian owner, a subsidiary of Carnival Cruise lines, issued a statement late Sunday saying there appeared to be “significant human error” on the part of the captain, Francesco Schettino, “which resulted in these grave consequences.”
Authorities were holding Schettino for suspected manslaughter and a prosecutor confirmed Sunday they were also investigating allegations the captain abandoned the stricken liner before all the passengers had escaped. According to the Italian navigation code, a captain who abandons a ship in danger can face up to 12 years in prison.
Schettino insisted he didn’t leave the liner early, telling Mediaset television that he had done everything he could to save lives. “We were the last ones to leave the ship,” he said.
Questions also swirled about why the ship had navigated so close to the dangerous reefs and rocks that jut off Giglio’s eastern coast, amid suspicions the captain may have ventured too close while carrying out a maneuver to entertain tourists on the island guaranteed payday loans.
Residents of Giglio said they had never seen the Costa come so close to the dangerous “Le Scole” reef area.
“This was too close, too close,” said Italo Arienti, a 54-year-old sailor who has worked on the Maregiglio ferry between Giglio and the mainland for more than a decade. Pointing to a nautical map, he drew his finger along the path the ship usually takes and the jarring one close to shore that it followed Friday.
Costa captains have occasionally steered the ship near port and sounded the siren in a special salute, Arienti said. Such a nautical “fly-by” was staged last August, prompting the town’s mayor to send a note of thanks to the commander for the treat it provided tourists who flock to the island, local news portal GiglioNews.it reported.
But Arienti and other residents said even on those occasions, the cruise ship always stayed far offshore, well beyond the reach of the “Le Scole” reefs.
Coast Guard Cmdr. Filippo Marini said divers had recovered the so-called “black box,” with the recording of the navigational details, from a compartment now under water, though no details were released.
Survivors described a terrifying escape that was straight out of a scene from “Titanic.” Many complained the crew didn’t give them good directions on how to evacuate and once the emergency became clear, delayed lowering the lifeboats until the ship was listing too heavily for all to be released.
“We were left to ourselves,” pregnant French passenger Isabelle Mougin, who injured her ankle in the scramble, told the ANSA news agency.
Another French passenger, Jeanne Marie de Champs, said that faced with the chaotic scene at the lifeboats, she decided to take her chances swimming to shore.
“I was afraid I wouldn’t make the shore, but then I saw we were close enough, I felt calmer,” she told Sky News 24.
Investors threw cold water on the New Year’s rally, with U.S. stocks set for a modest pullback at Wednesday’s open.
Dow Jones industrial average () and S&P 500 () futures were down 0.3%, while Nasdaq () futures were flat. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.
Jitters surrounding Europe’s debt crisis have resurfaced, leaving investors on edge. Uncertainty about Greece, along with reports that Spain might seek rescue funding, weighed on sentiment.
A spokeswoman for the Spanish government told CNN the reports were "a complete lie" and "radically false," and separately Greek officials said Tuesday that progress had been made.
"We’re still watching Europe simmering now. We have another summit coming up and the problems are all still there," said Scott Brown, chief economist for Raymond James.
Europe: Still a huge pain for investors
European Union leaders hold their first summit of 2012 on Jan. 30. Political leaders hashed out a fiscal agreement in early December, but investors remain skeptical about how effective it will be.
Stocks rallied Tuesday following strong manufacturing reports from China, India and the United States.
Bank stocks — one of last year’s worst-performing sectors — led the Dow higher in the prior session. Bank of America (, Fortune 500), Citigroup (, Fortune 500) and JPMorgan (, Fortune 500) all posted strong gains.
World markets: European stocks fell in midday trading. Britain’s FTSE 100 () lost 0.1%, while the DAX () in Germany shed 0.8% and France’s CAC 40 () slid 0.7%.
Asian markets finished mixed. The Nikkei () gained 1.2%, while the Shanghai Composite () fell 1.4% and the Hang Seng () lost 0.8%.
Economy: The Census Bureau will release data on factory orders for the month of November before the opening bell business cards. Analysts surveyed by Briefing.com expect orders to have risen 2.1% in November, after dropping by 0.4% in October.
In the afternoon, the Commerce Department will release data on auto and truck sales for December. Auto sales stood at a 4.36 million annual rate in November, while truck sales were at a 5.98 million rate.
Companies: Before the opening bell, Yahoo (, Fortune 500) shares dropped 1.6% on reports that the search engine will name eBay’s (, Fortune 500) PayPal President Scott Thompson as its new CEO. Shares of eBay fell 1.1%.
Caterpillar (, Fortune 500) shares fell 1% in premarket trading, after the construction equipment manufacturer announced it will expand its research and development center in Wuxi, China.
Dunkin’ Brands () shares climbed 1.5% ahead of the bell, after the company announced it plans to double the number of its Dunkin’ Donuts restaurants in the United States in the next 20 years. The chain currently operates about 7,000 restaurants nationwide.
Cabot Oil & Gas () announced a two-for-one stock split, after its stock rallied 105% over the last year. The company also plans to increase its quarterly dividend 33%. Shares rose 3.3% in early trading.
Currencies and commodities: The dollar rose against the euro and British pound, but fell versus the Japanese yen.
Oil for February delivery slipped 70 cents to $102.26 a barrel.
Gold futures for February delivery fell $2.60 to $1,597.90 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.96%.
Warning: This column will feature no Top 10 list recounting the year’s biggest retail and consumer stories.
Instead, I thought I’d do something that journalists don’t always do so well, which is to follow up on some of our stories. So as 2011 comes to a close, I checked in on two businesses I’ve spilled ink on in the last year.
First, I popped into La Mancha Coffeehouse, a small, gutsy undertaking in the up-and-coming but still-has-a-ways-to-go neighborhood of Old North. I first wrote about the cafe in March, when it was about to open at 2815 North 14th Street, down the street from Crown Candy Kitchen.
As you might remember, a group of ’social do-gooders” had run a nonprofit cafe — Urban Studio Cafe — in the same space for about two years, but it ended up closing when it couldn’t make ends meet.
So Victoria and David Holden, who lived nearby and didn’t want to lose what had become an important community space, decided to give it a go as a for-profit cafe.
When I stopped in around mid-morning one day this week, the shop was empty aside from Victoria Holden and her only other employee. They were tidying up behind the counter. So how were things going?
“We’re good,” Holden said. “We’re here.”
Most of her customers are regulars — teachers stopping in on their way to school or workers from a nearby Habitat for Humanity work site, for example. A chess club meets regularly at the shop. And it hosts poetry readings now and then.
But it can be pretty slow at times.
“Business is up and down,” she acknowledged. “Some months we don’t get a full salary.”
The shop had an uptick, however, around the holidays, with more catering orders coming in and people buying gift certificates as presents. And this month, the cafe expanded hours to accommodate a late afternoon and early dinner crowd.
“But it varies a lot,” she said. “I wish there was some kind of (traffic) pattern I could plan for. But some things do revolve around weather and paychecks.”
Still, she’s been heartened by the community support, including regulars who have urged her to raise prices if she needs to.
“They say, ‘We just want you to stay in business. We just want you to be here,’” she said. “So that’s really encouraging.”
By the way, she does plan to raise prices next year to keep up with the rising cost of food and supplies.
A VINTAGE NEW NAME
In May, I wrote about Vintage Stock, a chain of new and used music, movie and video game stores that was moving into some of the shuttered Borders bookstores around town.
The Joplin-based company opened these multimedia superstores, which are larger than most of its other stores, under the banner of “Bam!” Two stores opened over the summer — one at Chesterfield Mall and another at Mid Rivers Mall.
But when a third store opened right before Thanksgiving in the former Borders space in South County Center, it went by a different name: “V-Stock.” Then earlier this month, the other two stores switched to that name, too.
Rodney Spriggs, the company’s chief executive, was a bit vague about the change when I asked if it was because the giant bookstore chain Books-A-Million had objected to him using that name. He said he couldn’t comment but did note that Books-A-Million has been using the “BAM!” name more prominently recently.
“All I can really say is that generally V-Stock ties in closer to Vintage Stock,” he said. “We chose to change it.”
How have the new stores been doing?
“They’ve been great,” he said. “We’re very happy with the sales numbers that have come out so far. It seems like the St. Louis customer base has taken to the concept very well.”
The newest store in South County has actually outperformed the other two by about 10 percent so far, he said. He thinks some of that may be because of demographics.
“South County is a little more blue collar, and I think they really like the idea of the value of buying previously viewed products,” he said.
Spriggs also has been a bit surprised by the popularity of the stores’ movie-rental business. After all, in the age of Netflix and on-demand cable services, who would go all the way to the mall to rent movies?
But Spriggs thinks he knows who: mall employees.
The U.S. Treasury again shied away from labeling China a currency manipulator on Tuesday, but it rapped the country for not moving quickly enough on exchange rate reforms.
The United States also chided Japan for stepping into the currency market to stem the yen’s rise, and urged South Korea to use such interventions sparingly.
Some U.S. politicians have argued that China has gained an unfair competitive edge in global markets by keeping the yuan artificially low to boost exports, and pressure has mounted in Congress for President Barack Obama to punish China.
But the administration prefers to tread softly and use diplomacy. The U.S. Treasury, in a semi-annual report, as usual said that statutes covering a designation of currency manipulator “have not been met with respect to China.”
It repeated its standard line that appreciation in the yuan has been too slow, calling it “insufficient.”
“Treasury will closely monitor the pace of appreciation and press for policy changes that yield greater exchange rate flexibility, a level playing field, and a sustained shift to domestic demand-led growth,” it said in the report to Congress on international economic and exchange rate policies.
The value of the yuan, which Beijing manages closely, has risen 4 percent against the dollar this year and 7.7 percent since China dropped a firm peg against the greenback in June 2010. The Peterson Institute for International Economics recently estimated the yuan was undervalued by 24 percent against the dollar, down from 28 percent earlier in the year. It attributed the change to both Beijing’s policy of gradual currency appreciation and higher Chinese inflation.
At the heart of the friction between the two countries is a U.S. trade deficit with China that swelled in 2010 to a record $273.1 billion from about $226.9 billion in 2009. The cumulative Jan-Oct deficit with China is on track to top that this year, running at around $245.5 billion.
The U.S. Senate this year for the first time passed a bill that would require the administration to slap penalties on Chinese imports if it fails to adopt market-based exchange rates. While the measure has made no progress in the lower chamber and is unlikely to become law, it shows the mounting U.S. frustration with its vital trade partner.
President Obama at the November APEC meetings, in his toughest words yet, told President Hu Jintao that China must play by global trade rules and act like “a grown-up.”
Beijing has warned the United States not to “politicize” the currency issue, and some economists have pointed out that nations such as Japan and Switzerland have intervened in currency markets without drawing Washington’s ire.
TARGETING TOKYO
The report did point the finger at Japan this time, criticizing Tokyo for its solo yen-selling interventions in August and October that followed a joint Group of 7 action in the aftermath of the March 11 earthquake.
“The unilateral Japanese interventions were undertaken when exchange market conditions appeared to be operating in an orderly manner and volatility in the yen-dollar exchange rate was lower than, for example, the euro-dollar market,” the report said.
“In contrast to the post-earthquake joint G7 intervention in March, the United States did not support these interventions,” the Treasury said, adding that Tokyo should pursue reforms to revive its domestic economy rather than try to influence the exchange rate.
A senior Japanese government official said the report did not change Tokyo’s position that its currency policy was in line with G7 agreements.
“This report does not make it more difficult for Japan to intervene,” said the official, who spoke on condition of anonymity due to the sensitivity of the topic. “We are committed to doing whatever is necessary.”
Japanese exporters have complained that the ultra-strong yen puts them at a competitive disadvantage. The yen was trading at just under 78 to the U.S. dollar on Wednesday morning, about 3 percent weaker than it was on October 31, when Tokyo aggressively intervened to cap the rise.
The report also noted that South Korean authorities “should limit their FX interventions to exceptional circumstances of disorderly market conditions and adopt a greater degree of exchange rate flexibility.”
MORE OF THE SAME
Treasury Secretary Timothy Geithner has said the law on the FX report, which requires the administration to determine whether U.S. trade partners are deliberately undervaluing their currencies, is a poor tool to push Beijing on the yuan.
Instead, the United States prefers to argue for change at regular closed-door meetings with Chinese officials. It also uses international economic forums, such as the Group of 20 leading nations and the International Monetary Fund, to ramp up public pressure on Beijing to move more quickly to a more-flexible currency.
China is the biggest foreign holder of U.S. Treasuries, with about $1.1 trillion, a position that gives it leverage in international economic negotiations. Foreign exchange traders had not expected a change of U.S. tactics.
“It’s not very surprising. It’s sort of sliding it in under the radar. They’re (Treasury) really not in a position to make any major moves at this point,” said Sean Incremona, an economist at 4Cast in New York.
The Treasury Department has not labeled a country a currency manipulator since July 1994, when it cited China. A designation would require the United States to step up negotiations with Beijing on the yuan’s value.
The yuan slipped on Tuesday as strong dollar demand from corporations offset a record high mid-point fixed by the People’s Bank of China. The central bank set an all-time high dollar/yuan mid-point in an apparent move to let the yuan rise a little more at the end of 2011 so as to make the yuan’s full-year nominal appreciation look bigger, traders said.
Some U.S. manufacturers, which have been hit hardest by competition from China and other emerging economies, would still prefer the U.S. government to take a harder line.
“China’s currency is still enormously undervalued,” said Scott Paul, executive director of the Alliance for American Manufacturing, an industry lobby for hard-hit textile, steel and labor groups.
“I’m disappointed that President Obama has now formally refused six times to cite China for its currency manipulation, a practice which has contributed to the loss of hundreds of thousands of American manufacturing jobs.”
The worldwide popularity of loyalty programs has created a headache for the companies that offer then. There are trillions of banked miles and travel reward points out there that they
Regulators on Friday closed small banks in Iowa and Louisiana, lifting to 90 the number of bank failures in the U.S. this year.
The number of closures has fallen sharply this year as banks have worked their way through the bad debt accumulated in the recession. By this time last year, regulators had shuttered 149 banks.
The Federal Deposit Insurance Corp. seized Polk County Bank, based in Johnston, Iowa, with $91.6 million in assets and $82 million in deposits. It also closed Central Progressive Bank, based in Lacombe, La., with $383.1 million in assets and $347.7 million in deposits.
Grinnell State Bank, based in Grinnell, Iowa, agreed to assume the deposits as well as the loans and other assets of Polk County Bank. New Orleans-based First NBC Bank agreed to acquire all the deposits and $354.4 million of the assets of Central Progressive Bank.
The failure of Polk County Bank is expected to cost the deposit insurance fund $12 million; that of Central Progressive Bank is expected to cost $58.1 million.
Polk County Bank was the first bank in Iowa to fail this year, while Central Progressive Bank was the first Louisiana lender to fail this year.
In all of 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. Those failures cost around $23 billion. The FDIC has said 2010 likely was the high-water mark for bank failures from the Great Recession.
In 2009, there were 140 bank failures that cost the insurance fund about $36 billion, a higher price tag than in 2010 because the banks involved were bigger on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.
From 2008 through 2010, bank failures cost the fund $76.8 billion. The FDIC expects failures from 2011 through 2015 to cost $19 billion.
The deposit insurance fund fell into the red in 2009. With failures slowing, the FDIC’s fund balance turned positive in the second quarter of this year; it stood at $3.9 billion as of June 30.
Dubai’s fast-growing airline Emirates is kicking off the Mideast city’s airshow with an order for 50 Boeing 777s.
The list price for the deal is $18 billion, but airlines typically negotiate discounts for large orders. The announcement was made Sunday by Emirates chairman and CEO Sheik Ahmed bin Saeed Al Maktoum.
Emirates is the Middle East’s largest carrier. It is owned by the government of Dubai, which is recovering from a debt-fueled financial crisis that came to a head two years ago.
The carrier is Boeing’s largest customer for the wide-body 777. Its young fleet also includes Airbus A330s and A340s, and the double-decker A380.
Premier Wen Jiabao has promised China’s struggling exporters a stable exchange rate in a move that might fuel tensions with Washington over Beijing’s currency controls as the global economy weakens.
Wen’s pledge, reported by the official Xinhua News Agency and state radio, comes after the U.S. Senate approved a measure to allow higher tariffs on Chinese goods that critics say are unfairly cheap due to an artificially undervalued currency.
Beijing’s exchange rate controls are especially sensitive at a time when other nations are trying to revive growth by boosting exports and complain that a weak Chinese yuan is widening the country’s swollen trade surplus.
Wen’s pledge Friday at a trade fair in southern China came after export growth suffered an unexpectedly steep decline in September, hurt by a fall in sales to Europe amid the continent’s debt crisis.
Wen promised a “basically stable exchange rate,” Xinhua said. He pledged to maintain export-related tax rebates and other support.
U.S. manufacturers complain the yuan is undervalued by up to 40 percent, giving China’s exporters an unfair price advantage and wiping out American jobs. Beijing has allowed the yuan to gain by about 7 percent against the dollar since June 2010 in tightly controlled trading, but that is not as fast as critics want.
The measure approved Tuesday by the Senate would allow Washington to raise tariffs on goods from countries that the U.S. Treasury concludes are manipulating exchange rates for a trade advantage. The bill is not expected to become law because it lacks the support of the leadership of the lower House of Representatives, which has yet to vote on it.
China’s government reacted angrily to the measure, dismissing it as protectionism at a dangerous time for the shaky world economy and warning that trade relations would be damaged if it were allowed to become law.
China’s economy, the world’s second-largest, is relatively robust, with growth forecast by the World Bank of 9.3 percent this year. But weakening exports by Chinese manufacturers that employ millions of people could lead to layoffs and social tensions.
September’s export growth fell to 17.1 percent over a year earlier, down from August’s 24.5 percent, customs data showed Thursday.
The Dow Jones industrial average slipped early Tuesday, giving up some of its 330-point gain the day before, on worries that Slovakia might not approve a plan to strengthen a European financial rescue fund.
If Slovakia defeats the measure it would complicate efforts to deal with Europe’s debt crisis, which has been rattling markets for months. The measure would increase the size and powers of Europe’s financial rescue program, allowing large amounts of funds to be released quickly to banks and struggling governments before a full-blown crisis sets in. Sixteen countries that use the euro have approved it so far; Slovakia is the holdout. A vote is expected later in the day.
Investors worry that if Greece defaults on its debts, it would hurt banks in Europe and in the U.S. by causing the value of Greek government bonds they hold to plunge. With weaker balance sheets, those banks could become even more reluctant to lend to each other and to businesses and consumers, putting a drag on an already weak global economy.
The Dow Jones industrial average fell 44 points, or 0.4 percent, to 11,395 at 10 a.m. JPMorgan Chase & Co. fell 1.9 percent, the most of the 30 companies in the average.
The Standard & Poor’s 500 index fell 5, or 0.4 percent, to 1,190. The Nasdaq composite index fell 4, or 0.2 percent, to 2,562.
The declines erased some of the gains from Monday, when the Dow jumped 330 points, its largest point increase since Aug. 11. Investors were encouraged after French and German leaders said they would finalize a response to the debt crisis by the end of the month. The plan was light on details.
Dollar Thrifty Automotive Group Inc. fell 2.7 percent after the car-rental company said it was taking itself off the market after failing to get acceptable takeover proposals from Hertz or other companies.
Discount retailer 99 Cents Only Stores Inc. rose 4.3 percent. Ares Management LLC and the Canada Pension Plan Investment Board have offered to buy the company for $22 per share in cash, a 7 percent premium from Monday’s closing price.
Sprint Nextel Corp. fell 1 percent. The stock has plunged 24 percent since Friday, when Sprint said it wants to speed up plans to revamp its high-speed wireless network. Analysts say that will raise its expenses dramatically.
After the closing bell, aluminum maker Alcoa Inc. will become the first company in the Dow Jones industrial average to report third-quarter results. Analysts expect earnings from S&P 500 companies to rise about 12 percent from the same period last year, according to data provider FactSet. Revenue is expected to rise 11 percent.
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