Analysts Wary, With Newspaper Earning Reports Due This Week--McClatchy Stock Down

By: E&P Staff With earnings reports due from several large newspaper publishers this week, has the newspaper business has hit rock bottom?

USA Today publisher Gannett and publisher Media General, whose properties concentrated in the Southeast, will report on Wednesday. The following day will bring earnings reports from Tribune, McClatchy and The New York Times Company. Knight Ridder reports Friday.

McClatchy is expected to earn 68 cents per share, down slightly from 69 cents per share a year ago. McClatchy has seen its stock price sink 34.2% from its 52-week high of $74.50 on April 15, 2005, closing Friday at 49.05.

In an article in Sunday's New York Times, analysts say this week's reports are unlikely to be very positive, pointing to static ad revenues and the growth of other forms of media.

"Industry numbers have been somewhat disappointing," Frederick Searby, an analyst at J. P. Morgan, is quoted as saying. "It's going to be a very tough year again....I'm not sure we've seen the worst of it," he said of the slump in share prices. "I don't think there's huge downside, but I don't think there will be anything in the numbers where people will say, 'Boy, I wish I'd bought this stock.' "

Another analyst, Lauren Rich Fine, is quoted as predicting a 3.5% drop in earnings compared to last year. But she says that the stocks of large newspaper companies have bottomed out.