Newspaper Shares Down on Lower Estimates

Oct. 2, 2006, 1:43PM

2006 The Associated Press

NEW YORK — Shares of newspaper publishers headed mostly lower Monday after a Deutsche Bank analyst lowered his fourth-quarter and full-year 2007 earnings estimates on some companies.

Analyst Paul Ginocchio cut full-year 2007 forecasts on Tribune Co., New York Times Co., McClatchy Co., Belo Corp., Lee Enterprises Inc., E.W. Scripps Co., Washington Post Co., Gannett Co. and Media General Inc. due to weaker-than-expected third-quarter advertising trends. Tribune's full-year earnings per share estimate fell to $1.99 from $2.01, while the New York Times dropped to $1.36 from $1.46. McClatchy's estimate slipped to $2.52 from $2.62 and Media General sagged to $2.37 from $2.44. Belo declined to $1.10 from $1.13, Lee fell to $1.91 from $1.95, Scripps shed a penny to $2.40 and the Washington Post slumped to $42.27 from $43.91. Gannett dropped to $4.85 from $4.95 per share.

"The biggest change in ad growth over the next two to three quarters will be real estate and help wanted classified, both of which are showing weakening trends," Ginocchio said in a Sunday client note. "We maintain our cautious view on newspaper publishers."

He also reduced fourth-quarter earnings per share estimates on Belo, Gannett Co. and Medial General. Belo declined to 47 cents from 49 cents, Gannett sagged to $1.50 from $1.53 and Medial General declined to $1.33 from $1.35.

Ginocchio said next year could be difficult for the sector.

"Online will still be greater than 10 percent of ad revenue for most companies, and even if some publishers are successful in implementing a more innovative culture, the impact probably won't be apparent financially until late 2007 or early 2008," he said.

Shares of Gannet fell 18 cents to $56.65, Lee slipped 36 cents to $24.88 and Media General lost 84 cents to $36.88 in afternoon trading on the New York Stock Exchange. McClatchy dropped 64 cents to $41.55, New York Times slumped 43 cents to $22.55 and Scripps declined 36 cents to $47.57 on the Big Board. Tribune dipped 6 cents to $32.66 and the Washington Post fell $4 to $733.

SOURCE Houston Chronicle