Newspaper publishing is often considered a dying industry. Research firm PWC claims that worldwide newspaper revenues declined almost 1% annually last year, and will continue falling through 2019. But despite that dire forecast, investors should keep an eye on Gannett , which is aggressively consolidating the domestic newspaper market, and The New York Times , which staged a surprising digital recovery under a new CEO.
Last quarter, The Times' revenue rose 0.7% annually to $367.4 million and beat estimates by $2.7 million. Circulation revenue inched up 1.1% to $209.1 million, but advertising revenue slipped 2.1% to $135.4 million. On the bottom line, adjusted earnings tripled to $0.09 per share, exceeding expectations by three cents.
Watch these stocks, but don't buy them yet
The new Gannett and The New York Times are both key publishing stocks to watch, but neither one is a compelling buy yet. Gannett's trailing P/E of 10 looks cheap compared to the industry average of 14 for the newspaper publishing industry, but its circulation and advertising revenues are still headed in the wrong direction. Meanwhile, The New York Times looks like a compelling turnaround story, but its P/E of 50 looks a bit too pricey.
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The article Stocks to Watch in Publishing: Gannett Co Inc. and The New York Times Co. originally appeared on Fool.com.
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