By: Jennifer Saba The newspaper industry's revenue outlook remains guarded as both Merrill Lynch and Goldman Sachs expect stagnant advertising growth for the remainder of the year and 2005.
Though August was a strong month for many newspapers--the second best performance of the year, up 6.1% from the previous month, according to Goldman Sachs--four companies pre-warned that September would be soft. For Q3, Merrill Lynch is predicting 4.5-5% ad revenue growth over the same period last year, a similar growth rate to the beginning of this year. Merrill Lynch sees the recent onslaught of hurricanes as a "wildcard" for Q3, as they hurt any immediate revenue prospects yet "tend to boost advertising during the rebuilding effort."
Goldman Sachs said that despite the flags of caution, "expectations may still be too optimistic for the Q4" because of the difficult revenue comparisons many companies are sure to face. Only an improved ad market --a distant hope at the moment--would change that view.
Nor does Goldman Sachs expect any lift from political ad dollars that so many newspapers companies are making a run at. "Consistent with typical patterns," the report said, "publishers are not seeing a benefit from political ad spending, most of which accrues to TV broadcasters."
Of all the newspaper companies, Gannett remains at the top of the pack in terms of ad revenue growth--9.5% year-to-date, compared with the industry growth of 5.5%, according to Goldman Sachs. Both firms pin the increase on new product introductions.
Comments
No comments on this item Please log in to comment by clicking here