By: Jennifer Saba It can't get any worse than 2007 right? At least private newspaper companies are banking on 2008 to be a better year, barring a recession, that is. But will it be?
Deutsche Bank analyst Paul Ginocchio polled 15 executives from a variety of private newspaper companies, small and large alike, to get their views on the upcoming year. On average, profits will most likely trail revenue thanks to rising newsprint costs.
Ginocchio wrote that he's expecting the public companies to report much the same this week in New York.
Revenue is forecasted to decline 5% this year and drop 1.5% next year for private companies.
Next year should bring more alliances, outsourcing, and an emphasis on mobile technologies, according to the note. Ginocchio wrote that several of the participating executives were "skeptical" of the Yahoo partnership; a few thought it would produce benefits, while the rest are waiting it out on the sidelines.
The outsourcing of production, technology and customer service should continue.
"We see some value in the sector, but uncertainty make us cautious," according to the note. Deutsche Bank rated three companies as buys, The Washington Post, Lee, and Tribune. DB's analysis suggests "most of the newspaper stocks are fairly valued at the moment."
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