Goldman Sachs issued a pessimistic report on newspapers’ revenue trends this afternoon in the wake of The New York Times February numbers announced earlier today.
It reads in full: “We believe the February revenue report from The New York Times Co. illustrates the continued difficulty in the operating environment for newspaper publishers. Consistent with our expectations, ad revenue growth remains anemic, particularly in the New England Media Group (where ad revenue dropped 12% in February), and cost pressure continues to hurt profitability, evidenced by an EPS guidance range that implies margin contraction.
“Bottom line: The industry continues to face a very challenging ad revenue backdrop and cost pressures, leading to a downward bias in estimate revisions. We are trimming our NYT estimates. We continue to recommend an underweight position in the newspaper group.”