By: E&P Staff An increase in advertising and help wanted revenue plus improving operating margins have boosted the newspaper industry in the first quarter, according to a report released today by Goldman Sachs.
Ad revenue continues to gain steam. Overall, March numbers were the industries' best since December 2002, according to the investment firm. And all three categories -- national, retail and classified -- continue to show gains. March classified revenues for the industry grew 9.7% -- the best since March 2000. National advertising jumped 14.5%, the strongest gain since December 2002.
Goldman Sachs expects the momentum to continue with April, although the firm cautions that an early Easter may have pushed numbers up.
In regards to help wanted numbers, the report questions the "increasing disconnect between the Conference Board help wanted index," which is flat, versus the firm's estimates, up 12% in March. Part of this could be attributed to the fact that the Conference Board measures newspaper print ads in the country's top 50 markets without taking online into account.
First quarter newspaper earnings beat estimates, posting 10.9% versus the firm's forecast of 8.6%. The report said that nine out of 13 reporting companies announced EPS ahead of expectations, with only The New York Times reporting a decline. For the second quarter, Goldman Sachs predicts that EPS will grow approximately 12%.
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