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Goldman Sachs: More Challenges Ahead

Magazine article Editor & Publisher

Goldman Sachs: More Challenges Ahead

Article excerpt

The MediaWeek conference held in New York didn't offer any relief from what is shaping up to be "annus horribilis" according to Goldman Sachs.

November and December results are expected to be just as soft as October's, which fell 6.9%. "The overall ad picture for the newspaper industry remains exceptionally challenging," Goldman Sachs analyst Peter Appert wrote in a note.

"We see nothing on the near-term horizon to alter our long-held view that investors should remain underweight the sector."

The next year could be even more of a mess if the economy sputters and newsprint prices rise.

Meanwhile, Appert and his team remarked on the conditions of several companies in their coverage universe.

Though Gannett is an "exceptionally well-run company" particularly when it comes to cost control, it's not immune to industry trends. "Even the best managed company will have a difficult time posting positive earnings comparisons on a near-term basis," according to the note.

Nor is GateHouse sheltered from the environment despite its strategy to maximize free cash flow. "Near-term organic revenue trends are challenging and the market's reduced appetite for risk has weighed on Gatehouse shares," Appert wrote. …

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