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Analysts dropping coverage of newspaper stocks

April 16, 2007

Analysts who follow newspaper stocks are dropping their coverage because investor interest in the industry has shriveled.

Citing the circulation trend, one Goldman Sachs Group Inc. analyst compared himself to the Maytag repairman no one wants to call, according to Bloomberg. Others are following different industries or pursuing new careers. Long-time analyst John Morton wrote his last newsletter March 15 because, he said, readers were tired of the bad news.

Daily circulation has plunged by nearly a third since 1985, and in the past three years the Standard & Poor’s 500 Publishing & Printing Index has retreated 14 percent while the S&P 500 climbed 29 percent.

Gannett Co. Inc., publisher of The Indianapolis Star, is faring better than most newspaper companies. Analysts surveyed by Bloomberg expect the McLean, Va.-based company to report a 1-percent decline in first-quarter revenue compared to the 5 percent for Chicago-based Tribune Co. and 14 percent for the New York Times Co.

Still, those analysts also expect Gannett profit to fall 12 percent, to $208 million, at least partly due to its newspaper performance.

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