By: The Associated Press
Several newspaper publishers reported strong growth in help-wanted and online advertising revenues Tuesday but cautioned that auto advertising remained sluggish.
Speaking to investors and analysts at an annual conference put on by the Newspaper Association of America, an industry group, the publishers were generally upbeat about prospects for an advertising pickup in the second half of 2005.
The New York Times, which last week lowered its forecast for second-quarter results, expects advertising to be lifted in the second half of the year, partly on entertainment advertising given that 24 more movies are scheduled to be released in the second half of 2005 versus the same period a year ago.
E.W. Scripps Co., which owns several cable channels and newspapers including the Rocky Mountain News in Denver, expects newspaper advertising to grow between 5 percent and 7 percent in the second half of the year.
Online advertising, while still relatively small compared to total revenues, was a bright spot for several publishers. Knight Ridder Inc. reported a 54 percent rise in online revenues in the year to date through May, and Journal Register Co., publisher of the New Haven Register, said it expects online revenue to grow about 45 percent to $9 million this year.
On the whole, many investors remain lukewarm on newspaper stocks given their challenges in losing audience to the Internet, dealing with declines in circulation as well as circulation misstatements at a few papers, and the consolidation of several major advertisers in the retail and telecommunications industries.
William Bird, a publishing analyst with Smith Barney, wrote in a note to investors Monday that while the newspaper industry’s “out-of-favor status intrigues us … unfortunately we believe it is warranted.”
Bird said possible catalysts for the industry could include a pickup in acquisition activity, stabilization of circulation trends and stemming the migration online — though he said none of those factors seem likely in the near term.
Janet Robinson, CEO of The New York Times Co., told investors at the conference that challenges facing the industry are “formidable,” but so too were the responses being taken.
Robinson cited new products the Times was introducing such as its new “T” magazine, selling advertising in more targeted zones and also selling ads across the company’s properties. The Times also publishes The Boston Globe, the International Herald Tribune, a group of regional newspapers and several major Web sites.
Tony Ridder, the CEO of Knight Ridder, said that national advertising, which was strong in January and February, “fell off” in March and has not yet rebounded. He was optimistic that it would rebound in the second half. Overall year-to-date advertising was up 3 percent at Knight Ridder.
Media General Inc., a Richmond, Va.-based company that publishes The Tampa Tribune and other newspapers, said strong growth in employment advertising led to a 9.1 percent rise in the year to date in classified advertising, though that momentum has been slowed by lower auto ads.