Gannett (GCI) is expected to benefit from positive trends witnessing in both print and digital advertising with advertisers spending gaining pace. Consequently, the rate of fall in advertising revenue is decelerating.
The company is transmuting its business model by adding diverse revenue streams to make it less susceptible to economic conditions. The company is also committed to streamlining its cost structure, strengthening its balance sheet, and rebalancing its portfolio.
All these help the company to post better-than-expected second-quarter 2010 results. We upgraded shares of GCI to a Zacks #1 Rank on July 24, and from Neutral to Outperform on July 13, 2010.