J.P. Morgan Raises Gannett, New York Times Co. Estimates

By: Jennifer Saba

The latest announcements from Gannett and The New York Times Co. indicating cuts, furloughs and salary freezes has prompted J.P. Morgan analysts to raise EPS estimates due to the two companies’ cost cutting. Revenue is expected to be weak next year despite easing year-over-year comparisons.

“We are modestly lowering our revenue estimates for both [Gannett] and [the New York Times] to reflect continued advertising and circulation challenges, but improvement on the cost side is expected to more than compensate for lower revenues,” wrote analysts Alexia Quadrani and Monica DiCenso in a note to investors.

For the New York Times, J.P. Morgan is raising its Q4 earnings per share to 36 cents from 34 cents and in 2010 EPS is expected to be 36 cents versus 31 cents. J.P. Morgan is retaining its Q4 EPS estimate for Gannett at 62 cents but raising its estimates in 2010 to $1.57 from $1.51.

“We believe that the fundamental outlook remains challenged even in a better economic backdrop of 2010 as classified revenues continue the migration out of print, which will likely limit multiple expansion from current levels,” they wrote.

Shares of Gannett (NYSE: GCI) and New York Times (NYSE: NYT) are rising in late morning trading. GCI is up 18 cents to $10.05 and the NYT is up 12 cents to $8.64.

Executives from Gannett and the New York Times will be presenting next week during the UBS Annual Global Media & Communications Conference in New York.

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