The Future of Print

Newspaper stocks surge as their own news improves

Posted in Boom by futureofprint on September 30, 2009

SAN FRANCISCO — Newspapers may have finally stopped — or at least slowed — their harrowing descent into a financial abyss after three years of plunging revenues, crumbling stock prices and shrinking staffs.

The latest glimmer of hope came Tuesday when Gannett Co., the largest U.S. newspaper publisher, announced that its third-quarter earnings will be substantially above analysts’ forecasts.

But Gannett’s modest progress suggests newspapers might at least be able to recover some of the revenue lost since 2006. Analysts suspect a rebound could begin soon and accelerate next year, particularly if advertising for homes, cars and jobs picks up.

If that happens, newspaper profits should surge because publishers have lowered their costs dramatically by jettisoning thousands of workers, slashing wages and closing offices. Less advertising also means smaller print editions, reducing the need for newsprint — the industry’s second-highest expense after labor.

Via AP

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