Earnings Preview: The New York Times Co.

The New York Times Company (NYT) is expected to report Q2 earnings Wednesday, July 23 before market open, with a conference call scheduled for 11:00 am ET.

Guidance

Analysts are looking for a profit of 22c on revenue of $754.09M. The consensus range is 19c to 24c for EPS, and revenue of $748.2M to $762.1M, according to First Call. The company recently reported that May revenues decreased 6% from May 2007; advertising revenues decreased 11.9% and circulation revenues increased 1.9%.

Analyst Views

In a July 1 note to clients, Deutsche Bank upgraded shares to Hold from Sell said that the current valuation relative to peers is justified by better long-term growth prospects, tempered by a 2H slowdown in national advertising, which will disproportionately impact the company. The firm decreased the FY08 EPS estimate to 91c from $1.02 due to an increased forecast for the cost of newsprint and a slight reduction in our revenue forecast for the back half of the year. Given the company's growth profile and relatively low leverage, the firm believes it should trade at a meaningful premium to the group.

Wachovia downgraded the newspaper industry in June to Underweight from Market Weight as it believes increasing food and fuel prices, and rising unemployment, will negatively impact advertising through 2009. Also in June, Bloomberg speculated that the company is one of the large companies that may have to cut its dividend, since the dividends greatly exceed cash flow.

Comments

[pchem]

I tend to agree with drmalaka.However,I held my nose and bought.There's money to be made when the NYT goes the way of other family-controlled businesses,i.e., the WSJ,Anheuser,et al.