Newspapers to See Sluggish Sales Growth

Newspaper publishers likely will match this year’s modest earnings gains in 1990, as slow advertising revenue growth mutes the benefit of cheaper newsprint.

Analyst projections of earnings growth ranging from 8% to 10% would mean next year’s profits will be slightly below average for the newspaper business. Earnings gains of 10% to 12% are the average.

“A soft advertising performance and the inability to raise ad rates much greater than the inflation rate has put some pressure on profits,” said John Morton, media analyst for Lynch, Jones & Ryan in Washington.

“What will help is that newsprint price hikes are not likely,” he said.

Revenue growth from advertising continues to be sluggish with analysts looking for 4% to 6% growth next year.

The analysts said companies with operations in the Northeast and Southwest seem to be headed for the toughest times because of regional economic weakness.