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February 26, 2007
More bad news for NYT shareholders
Thomas Lifson
MarketWatch reports that yet another prestigious securities firm, Lehman Brothers, has downgraded the stock of the New York Times Company:
"We remain concerned about the deteriorating top line at all three of the company's newspaper divisions," the broker said. It told clients that the Boston Globe newspaper continues to struggle, with January advertising revenue down 10%. Meanwhile advertising revenue at the New York Times has been weak since 2001, Lehman noted. Overall, Lehman said it believes consensus forecasts for the company's earnings are too high.
When the top line (revenues) is in trouble, cost cutting alone will usually not suffice. Yet management led by a chief executive who owes his position to nepotism continues to position the newspaper properties as propaganda organs, destroying a century's legacy as a trusted news source. As we have been saying for years, well before the company's crisis became visible in its stock price, Pinch Sulzberger is destroying the value of the company founded and nurtured by his ancestors.
Hat tip: Ed Lasky
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