Sector Snap: Newspaper Publishers’ Stocks Down on Gannett News

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Shares of newspaper publishers traded mostly lower Friday, a day after Gannett Co., the largest U.S. newspaper publisher, reported lackluster ad sales for February and issued a first-quarter profit outlook.

The company, which publishes USA Today and other papers, said Thursday its advertising revenue, the biggest part of the company’s total revenue, fell 3.8 percent in February to $385 million from $400.4 million in the previous year.

Broadcasting and newspaper ad sales both slipped, while net paid circulation also declined, Gannett said.

The company also said it anticipates first-quarter earnings in a range of 88 cents to 90 cents per share. Analysts surveyed by Thomson Financial are looking for a profit of 90 cents per share.

Prudential Equity Group analyst Steven Barlow said in a client note that he would like to see an increase in Gannet’s revenue growth.

“The company always got high marks for cost control but revenue growth on a pro forma basis has been about average with the industry the last couple of years,” he wrote.

Lisa N. Monaco of Morgan Stanley is holding a cautious outlook on the stock due to the weak February results.

“Revenues look to be far from reaching some sort of a trough and until we see some indication of stabilization we would steer clear from owning the shares,” she said in a client note.

Shares of Gannett dropped $1.78, or 3.1 percent, to $56.46 in afternoon trading on the New York Stock Exchange. Over the past 52 weeks the stock has traded between $51.65 and $63.50. Tribune Co.’s stock fell 62 cents, or 2.1 percent, to $29 on the NYSE. Shares have traded in a range of $27.08 to $34.28 in the last 52 weeks.

Share of New York Times Co. slipped 35 cents to $24.14, while E.W. Scripps Co. shed 4 cents to $43.56 on the Big Board.

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