Downgraded Tribune, Gannett Stocks Hit New 52-Week Lows

By: E&P Staff Investors battered Tribune Co. stocks again Wednesday, pushing the share price to a new 52-week low for the second session in a row on news that JPMorgan had downgraded the publisher of the Chicago Tribune and Los Angeles Times.

At the 4 p.m. EST close of trading on the New York Stock Exchange, Tribune shares were down 90 cents to $31.81, a decrease of 2.75%. On Tuesday, the stock set a previous 52-week low of $32.70. It has traded as high as $44.32 in that time period.

Stock of the nation's biggest newspaper publisher, McLean, Va.-based Gannett Co., was also downgraded Wednesday. Deutsche Bank issued a report downgrading Gannett to "Hold" from "Buy."

Gannett, which hit its previous 52-week low of $65.80 on Monday, closed Wednesday at a new low of $64.67, down $1.55 or 2.34%. The stock of the USA Today publisher has traded as high as $85.17 in the period.

Wednesday, Gannett reported its third-quarter earnings were down 4%, mostly on lower broadcast advertising revenues, and higher costs, including newsprint.

Though Tribune has been going through a rough patch with recent downgrades of its debt because of an adverse U.S. Tax Court ruling that left it with a tax bill of nearly $1 billion, JPMorgan said it downgraded the company to "Neutral" from "Overweight" because of concerns about the strength of its future advertising revenue.

JPMorgan noted that the merger of Federated Department Stores Inc. and May Department Stores Co. will mean the closing of 15 department stores in Tribune markets.

Hollywood's widely expected reduction in movie ads also factors into the firm's calculus.

With movie advertising representing fully 6% of ad revenues at the Los Angeles Times, Tribune will be affected by any cutback even more than other media companies.