Despite expressing confidence that they will meet analysts’ reduced second-quarter forecasts, several US media companies offered little hope of an imminent let-up in the ad downturn.
Knight Ridder – America’s number two newspaper publisher – predicted that Q2 ad revenue would be down 8%–9%. Despite seeing no sign of an immediate upturn in advertising, it did add: “We seem to have hit bottom.”
Ridder – which said predictions of Q2 earnings of 71 cents per share were “reasonable” – also confirmed it is to axe a further 1,700 staff, bringing the total number of layoffs in recent months to 2,100, some 10% of the firm’s workforce.
Similarly, Dow Jones – publisher of the Wall Street Journal – revealed it has seen no indication of an ad turnaround this month, after May brought a 34% year-on-year fall in the flagship paper’s per-issue ad linage [WAMN: 11-Jun-01].
The startling slump in advertising at the WSJ is due largely to the current weakness in financial and technology spend, which last year accounted for half the paper’s ad revenue. Declaring that it would follow a new strategy of aggressive acquisitions, Dow Jones said it was “hopeful of achieving” Q2 forecasts of 50 cents per share, but added: “Our actual June linage will be the final determinant of whether we make it.”
The New York Times Company also said it was “comfortable” with second-quarter earnings estimates of 43 cents per share, and expressed confidence that the economy would recover in Q4.
Washington Post, on the other hand, customarily refuses to comment on analysts’ forecasts. However, it stated that the prospects for its ad-dependent publications – including the eponymous newspaper and Newsweek magazine – are “weak” following an 8.4% fall in ad revenue in the five months to May.
News source: Wall Street Journal