Gannett’s heavy debt load, compounded with brutal financial pressures throughout the business, units the stage for a dismal future.
Driving the information: Gannett’s inventory dropped greater than 28% Thursday after an abysmal earnings report and bleak outlook.
- Gannett swung from a revenue to a internet lack of $53.7 million throughout Q2.
- The corporate additionally revised its 2022 full-year outlook to a internet lack of $60 million to $70 million. That is an enormous miss in comparison with the outlook it shared final quarter of $50 million to $70 million in internet revenue.
The intrigue: Gannett CEO Mike Reed mentioned the corporate nonetheless intends to repay $150 million to $200 million in debt this 12 months, noting plans to promote actual property and cut back prices of its print enterprise.
- Gannett Media head Maribel Perez Wadsworth additionally emailed workers on Thursday about impending layoffs, eradicating some open roles and reductions to freelance and journey budgets.
Sure, however: Maybe extra regarding: Gannett’s $1.34 billion debt load.
What they’re saying: When requested about Gannett as a candidate for takeover, Huber Analysis Companions’ Douglas Arthur mentioned, “Lot of debt. That might be an costly ticket for somebody in business.”
- “Besides at massive nationwide titles like The New York Instances, new digital revenues nonetheless haven’t picked up the tempo to completely cowl print income losses,” Poynter’s Rick Edmonds writes.
- “So the very last thing the business wants, after the COVID financial system shock, is one other spherical of income hits and price stress,” he added.
The underside line: The very last thing Gannett wants is the fixed fear of paying down debt when the enterprise requires money to get itself out of its present gap.