U.S. newspaper publisher Gannett Co., Inc. today posted a first quarter profit that beat estimates, Reuters reported. The publisher posted a net income of US$119.3 million, up from $77.7 million at the same time last year. Share prices were also up on the news, to 49 cents a share, compared to 34 cents a share last year.

"The good news matters," MarketWatch's Jon Friedman wrote. "Sometimes, improved profit figures simply result from executives ruthlessly cutting expenses to the bone - and then crowing when, miracle of miracles, the numbers come out in their favour. As for genuine growth, it's anybody's guess whether the entity could achieve something tangible without the machete-like chopping."

However, Morningstar Analysts pointed out in the Toronto Star that the publisher's first quarter sales were down 4 percent from the same time last year, driven by a 7 percent decline in publishing revenue, and partially offset by a 17 percent increase in broadcasting revenue, mainly due to ad revenue during the Winter Olympics. On the bright side, operating margins improved to 16 percent, due to lower costs especially in the newsprint sector, which were down 32 percent from the first quarter of last year.

In a press release, Gannett noted that adjusted net income more than doubled that of last year, while operating cash flow was up as well. Meanwhile, operating expenses were down 11.3 percent on operating revenues that declined 4.1 percent.

"All of our business segments delivered substantially higher operating income and operating cash flow in the quarter. We more than doubled adjusted net income despite lower revenues and reduced our debt by approximately $260 million in the quarter," Craig Dubow, chairman and CEO, stated in the press release. "The momentum we had at the end of last year continued through the first quarter. Revenue trend comparisons improved in the quarter reflecting the positive impact healthier economies in the U.S. and the UK had on advertising demand as well as advertising revenue associated with the Winter Olympic Games. We also benefited from significantly lower costs due to greater efficiencies and substantially lower newsprint expense. We are well positioned for continued growth as the economy improves and we are extremely encouraged by the revenue trends and our ability to create and capture operating leverage."