New York Times' Ad Pictures Weakens, Downgraded By Wall Street

A major securities firm downgraded its rating of The New York Times Co., citing concerns over weak national advertising at the beginning of the year.

J.P. Morgan cut its rating to neutral on Wednesday morning, signaling to investors that revenues and earnings per share may not be as bullish as analysts had expected. J.P. Morgan's revised predictions of a 3.4 percent print ad growth in 2004 compared to industry estimates of 3.8 percent and its own estimates of 5.5 percent growth. New York Times Co. previously said its ad revenues would be up in the mid-single-digits for 2004.

Analyst Fred Searby wrote Wednesday morning that The New York Times Co.'s revenues got off to a slower start than expected in the new year, falling 0.2 percent in January compared to analysts' estimates of a 2.6 percent year-over-year increase. Indications are that the weakness will continue further into the year, he said.

It's particularly troubling in national advertising, which is the Times Co.'s largest category.

J.P. Morgan said that national ad growth would accelerate, although modestly, throughout the year--rising from low-single-digits in the first quarter to mid-single-digits in the second half. It expects weakness in several key categories, including movies, wireless, and automotive.



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