Analysts Expect April Ad Results Will Be 'Flat to Down' (Dinosaur Media Extinction Alert)

NEW YORK Next week publishers will begin posting April ad revenue and the results will likely be soft.

Goldman Sachs estimates industry ad revenue will be flat to down, 0% to 1%. In March, ad revenue grew 0.5%; year-to-date it’s barely up 0.2%.

Newspapers can partly place blame on Easter, which fell in April. Typically the holiday is good for retail advertising but bad for classifieds. And the way things have been going lately, classified advertising has been the one positive thing going for ad results – national has been “deteriorating” and retail has been “anemic,” according to Goldman Sachs.

Gannett, Journal Communications, and McClatchy are forecasted by Goldman Sachs to lag the group. The New York Times Co. will most likely report strong results for its flagship while Boston continues to drag down overall results. E.W. Scripps and Dow Jones should turn in strong ad revenue.

While Goldman Sachs doesn’t think April’s decline is dramatic, the research firm raises bigger flags. “Our recurring question,” said a note released today, “If publishers are struggling to post flat revenue when the economy is robust, what happens when the economy slows? The answer does not bode well for revenue growth over the next several years.”

BTW, check out News Corp's (NWS) earnings annoucemtnt...

NEW YORK, May 10, 2006 (BUSINESS WIRE) -- QUARTER HIGHLIGHTS
-- SKY Italia generates operating income of $69 million, an improvement of $90 million compared to the third quarter a year ago, as the subscriber base expands to more than 3.7 million subscribers.
-- Cable Network Programming operating income up 23% on increased affiliate revenue at the Regional Sports Networks and advertising strength at Fox News Channel.
-- Primetime ratings strength at the FOX Network and advertising growth at STAR drive Television operating income up 29%.
-- Filmed Entertainment delivers solid operating income contribution of $225 million. Decrease versus a year ago reflects record prior year results on strength of home entertainment sales of film and television titles.
-- Total print business operating income declines 9% as double-digit growth at Magazines and Inserts was more than offset primarily by the absence of TSL Education business earnings in the Newspaper segment following its sale in October 2005.
News Corporation (NWS, Trade)(NWSA, Trade) today reported third quarter operating income of $1.0 billion, an increase of 14% over the $889 million a year ago on revenues of $6.2 billion, up $155 million from the $6.0 billion reported in the third quarter of fiscal 2005. The year-on-year operating income growth was primarily driven by double-digit percentage increases at the Television, Cable Network Programming and Magazines and Inserts segments, as well as by a $90 million improvement at SKY Italia.
Third quarter net income of $820 million ($0.26 per share on a diluted combined basis(1)) more than doubled from the $400 million ($0.13 per share on a diluted combined basis(1)) reported in the third quarter a year ago. These results primarily reflect the increased consolidated operating income, higher equity earnings of affiliates and increased Other income, reflecting a gain on the sale of Innova partially offset by the unrealized charge for the fair value of certain outstanding exchangeable debt securities.

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