Earnings Preview: Gannett Reports Q4 Results Monday

Jan.25.12 | About: Gannett Co., (GCI)

Gannett Co., Inc. (NYSE:GCI) is expected to report last fiscal quarter's results before the opening bell on January 30, 2012. Let's review how Gannett Co. has performed in recent quarters. Gannett Co., Inc. operates as a media and marketing solutions company in the United States and internationally. Its Publishing segment publishes 83 publications in the U.S. The company was founded in 1906 and is headquartered in McLean, Virginia.

52 Week High: $18.93
52 Week Low: $8.28
Book Value: $10.40
Float Short: 8.51%

Analysts are expecting an improvement of $0.25 in earnings per share compared to last quarter's results of $0.44. Investors will be looking to see a number north of $0.69 per share, based on the earnings estimates. Analyst estimates range between $0.65 and $0.72 per share. The estimate is down from a year ago period when the publisher reported $0.83 per share. Gannett has been able to at least meet or beat estimates in the last five quarters.

The stock is performing like paper is not about to go out of style anytime soon. Being an old school paper liking book reader myself, I am happy to read about success in something other than a Kindle or tablet. Since the start of last month the stock has taken off and not looked back. Up almost 50%, with the shorter moving averages now moving higher, Gannett has had quite a run. While I like the company a couple things need to be pointed out. First, the short interest is alarming at a near one year high relative to trading volume. Secondly, the stock is up 50% within a couple of months, so some profit taking can be expected.

Technically, the move above the 200 day moving average was tested and passed. This is also bullish, but I would still be looking to hedge gains. Selling Feb $14 or $15 strike priced call options against some shares owned may be a way to add a little bit of downside protection without giving up your shares right away. Another way is buying the same strike put options, but it's hard to get ahead in long long run buying options into earnings only to sell them right after.

In the last month, the stock has increased in price 13.81%, a change from last year at this time 3.70%. The stock is performing extremely well when compared to the general stock market up to this point. When comparing to the S&P 500, the year up to date positive change is 10.25%.

For the same fiscal period year-over-year, revenue has declined to $5.44 billion for 2010 vs. $5.51 billion for 2009. The bottom line has rising earnings year-over-year of $588.20 million for 2010 vs. $355.27 million for 2009.The company's earnings before interest and taxes are rising with an EBIT year-over-year of $999.70 million for 2010 vs. $718.92 million for 2009.

Here is a look at the fiscal year revenue:

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Here is the last few quarters to get an idea how well they perform compared to estimates:

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Reported earnings per share compared to the mean estimate. Differences are rounded.

The total short interest number of shares for GCI:

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The number of days to cover short interest based on average daily trading volume for GCI:

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I use a proprietary blend of technical analysis, financial crowd behavior, and fundamentals in my short-term trades, and while not totally the same in longer swing trades to investments, the concepts used are similar. You may want to use this article as a starting point of your own research with your financial planner. I use Seeking Alpha, Edgar Online, and Yahoo Finance for most of my data. I use the confirmed symbols from earnings.com that I believe to be of the most interest.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.