By: Jennifer Saba The newspaper industry is having its worst year in terms of revenue performance since the 2001-2002 recession, according to a new report from Goldman Sachs. With that in mind, analysts believe it's "very unlikely" that revenue growth will accelerate in 2006.
The reason: Publishers struggled with posting 2% to 3% ad revenue growth this year in what is supposed to be a "sweet spot" in the cycle.
Analysts believe the consensus of 8% earnings per share growth is too aggressive even though the share repurchase programs announced by newspaper companies should be positive in terms of EPS gains.
Goldman trimmed its 2006 newspaper ad revenue growth forecast from 4% to 3.5%. That's based on national growing 1%, retail increasing 2.5%, print classified advancing 3.6%, and online rising 25%.
Year-to-date, Goldman's index of newspaper stocks is down 20.7% compared with the S&P500, down 1.7%, the radio index, down 12.5%, and the television index, down 14.8%. The research firm remains "underweight" on the sector.
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