Newspapers Pressed Downward

When three major names in newspaper publishing, New York Times (NYSE: NYT  ) , Tribune (NYSE: TRB  ) , and Belo (NYSE: BLC  ) , report their third-quarter results on Thursday, the outcome will likely be yet another indication of the ill health into which their once-proud industry has fallen.

This expectation of less-than-stellar quarterly numbers follows earlier softness at Gannett (NYSE: GCI  ) and Media General (NYSE: MEG  ) . Unfortunately, a return to economic health for traditional journalism does not appear imminent.

Headlines abound today blaming "declining advertising revenues" for publishing's growing malaise. And while that causal diagnosis is obviously correct, as far as it goes, the real problem is that fewer and fewer people anywhere curl up each day with their local fish wrapper. Most of you now ingest your news by tapping online sources. Even the broadcast news folks have stood by helplessly as the numbers of eyeballs showing up religiously for their daily 6 p.m. dose of edification has declined materially.

As a result, advertising has followed those eyeballs to companies like Google (Nasdaq: GOOG  ) , Yahoo! (Nasdaq: YHOO  ) , and other Internet-based entities. The newspaper folks are attempting to expand their online presence, but their sites seem frequently to lack the user friendliness of their made-for-technology brethren.

And so New York Times, which last month announced that it was selling its eight television stations to concentrate on its "core" business, may be embarking on a fool's errand. That core, the newspaper business, appears to be beset by a case of ineluctable softening. More immediately, for the September quarter, analysts anticipate flat-to-slightly down revenues for the company from last year's $791 million, while per-share earnings are expected to be transposed from $0.21 down to about $0.12.

Flat revenues are also the expectation for Tribune, the proud owner of some of the nation's oldest and grandest newspapers, including TheChicago Tribune and TheLos Angeles Times, along with a bevy of major television properties. But the company's per-share forecast also presupposes a decline, in this case from $0.50 to $0.45.

Belo Corp., whose properties include The Dallas Morning News, The Providence Journal, and 19 television stations, is also expected to report flattish revenues, along with an EPS that is forecast to decline about 10%, from $0.20 to $0.18.

Newspaper and broadcast journalism appears to constitute an industry with a less-than-inspiring profile. Therefore, as the results come in on Thursday, I'd suggest that you read all about them, but keep your wallet firmly in your pocket.

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A former journalism professor and department head, Fool contributorDavid Lee Smithshed an ink-stained tear as he wrote this story. He doesn't own shares in any of the companies mentioned and welcomes yourcomments.


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