Last I checked, Motley Fool Income Investor pick Lee Enterprises
The newspaper company's first-quarter net income dropped 18% to $11.9 million, or $0.26 per share. Total operating revenues decreased 1.7% to $261.7 million. Operating cash flow fell 3.2% to $58.4 million.
Lee may have had some bright spots in that its online advertising revenues jumped 54%, but that wasn't enough to keep overall total advertising revenue from decreasing by 2.2%. In its press release, the company also waxed optimistic on its agreement with Yahoo!'s
Of course, many investors are leery of the newspaper industry right now, and with good reason. So much advertising has migrated to the Internet -- look at Google's
Last time I wrote about Lee, I thought it looked awfully pricy in a slow-growth industry -- not that it was out of line with the multiples on rivals at the time. Today's 12% drop (on my last check) certainly does add up to a less lofty multiple than it was carrying several months ago; it's now got a trailing P/E of about 16. That still sounds a bit steep for my blood, considering this industry has so many challenges to growth. Although it does have a decent dividend yield -- which is one reason why it was recommended for Income Investor -- Lee's being a bit cheaper at the moment doesn't necessarily mean it's cheap enough.
For related Foolishness, see the following articles:
- Take a look at Lee's previous quarter.
- Lee had a chilly January.
- One Fool recently wondered, will all newspapers fold?
Yahoo! is a
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The New York Times is a former Income Investor pick.
Alyce Lomax does not own shares of any of the companies mentioned.