Job Data Could Buoy Q1 Numbers

By: E&P Staff Recent positive job data will potentially buoy first quarter advertising revenues for newspapers. According to a report released Thursday by Merrill Lynch First Vice President Lauren Rich Fine, a 3.5% gain in advertising revenues is expected for Q1.

It's also projected that ad revenues will remain on a positive climb for the rest of the year with "roughly 5% ad growth for Q2-Q4 due to strength in the classifieds, help wanted and retail categories."

Even though help wanted revenues are steadily increasingly, Fine wrote that "we are not convinced these gains will lead to positive upward revisions." Recruitment ads represented only 25% of total classified ad revenues in 2003 or approximately 9% of total ad revenues. There's also concern that the movement of help wanted advertising to online will not boost revenues as much since online advertising rates tend to be much lower than print's.

Circulation revenue is expected to be relatively weak partly because of the effects of the Do Not Call Registry. Estimated circulation revenue for Q1 is up 0.4%. Newsprint expense is expected to be up "roughly 10% on average during Q1, due almost entirely from an increase in newsprint prices."