By: Shares of newspaper stocks fell Friday, after credit ratings agency Moody's Investors Service warned that it is considering downgrading Tribune and the New York Times Co.
Tribune shares fell $1.10, or 3.6 percent, to $29.67 in afternoon trading on the New York Stock Exchange, putting the Chicago-based company's stock down 3 percent for the year so far.
Moody's earlier Friday said it is reviewing its debt rating on Tribune's unsecured, long-term debt, saying it has ongoing concerns about the outlook for the newspaper sector. Moody's also cited Tribune's high debt burden, versus its cash flow.
"Fundamentals in the newspaper sector will remain weak for the foreseeable future," Moody's said. "Of particular concern is the continuing downward trend in circulation and intensifying competition from online rivals."
On Thursday, Deutsche Bank analyst Paul Ginnocchio recommended that investors sell Tribune's stock, saying the company's February newspaper revenue was worse than expected, and that the second-half of 2006 "could significantly deteriorate from here." Ginnocchio previously recommended investors hold the shares.
The New York Times also faces a possible credit downgrade by Moody's. The ratings service earlier Friday said that it is concerned about the company's high financial leverage, deteriorating operating margins and weak free cash flow available for reducing debt.
New York Times shares fell 61 cents, or 2.3 percent, to $26.02 in recent trading.
The reports pulled other newspaper stocks lower as well.
Washington Post Co. shares fell $36.49, or 4.83 percent, to $718.50, while shares of local newspaper company Media General Inc. fell $1.59, or 3.2 percent, to $47.56.
USA Today publisher Gannett Co.'s stock fell $1.20 to $59.37.
Dow Jones & Co., publisher of the Wall Street Journal, was down 62 cents at $40.15 in recent trading.
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