The Zacks Analyst Blog Highlights: New York Times, InterActive, Penske
Automotive Group, Lithia Motors and Automotive
CHICAGO, Oct. 25, 2012
CHICAGO, Oct. 25, 2012 /PRNewswire/ --Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include The New York Times Company
(NYSE:NYT), InterActiveCorp (Nasdaq:IACI), Penske Automotive Group, Inc.
(NYSE:PAG), Lithia Motors (NYSE:LAD) and Sonic Automotive (NYSE:SAH).
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Here are highlights from Wednesday's Analyst Blog:
NY Times Offloads Assets
The current economic situation doesn't seem all well for publishing companies,
who are bearing the brunt of waning advertising demand. So, the companies are
streamlining their cost structure, strengthening their balance sheet, and
rebalancing their portfolio. Moreover, they are looking for new revenue
generating avenues to lessen their dependency on traditional advertising
Publishing companies have been divesting assets that have no direct relation
to the core operations. The New York Times Company (NYSE:NYT) recently
completed the sale of About Group, which it acquired in 2005, to
InterActiveCorp (Nasdaq:IACI) for a consideration of $300 million. The About
Group segment comprises the websites About.com, ConsumerSearch.com and
Caloriecount.com, along with other related businesses.
The decision came on the back of declining revenues. About Group's revenue
dropped 8.7% in the second quarter of 2012 due to fall witnessed in both
cost-per-click and display advertising. During the first quarter, the revenue
Prior to this, in May 2012, The New York Times Company divested its remaining
stake (210 Class B units) in the Fenway Sports Group, the owner of the Boston
Red Sox and the Liverpool Football Club, for $63 million.
Another example of shedding the assets by the company is the sale of Regional
Media Group in December 2011, – consisting of 16 regional newspapers, print
publications and associated ventures – to Halifax Media Holdings LLC, the
proprietor of The Daytona-Beach News Journal in Florida, for approximately
The publishing industry has been struggling with sinking advertising revenue
as more readers are gradually choosing free online news, thereby making the
print-advertising model increasingly irrelevant. To curb shrinking advertising
revenue and seek new revenue avenues, the publishing companies contemplated
charging readers for online content.
Despite hiccups in the economy, what still promises a guaranteed revenue
generation avenue is The New York Times Company's pricing system for
NYTimes.com, which was launched on March 28, 2011. The company notified that
the number of paid digital subscribers for The Times and the International
Herald Tribune reached 509,000 at the end of the second quarter of 2012,
reflecting a jump of about 12% since March 18, 2012.
The company also launched a pay and read model for BostonGlobe.com for a
weekly subscription of $3.99. The number of paid digital subscribers reached
23,000 at the end of the quarter, representing an increase of 28% since March
Penske Auto Raises Dividend
Penske Automotive Group, Inc. (NYSE:PAG) raised its dividend payment by 8.3%
to 13 cents per share for the third quarter of 2012 from 12 cents. The
increased dividend is payable on December 3, 2012 to shareholders of record as
on November 12, 2012.
Penske raises dividend almost every year. This is the third time the company
has increased its dividend payment in a year. In the first quarter of 2012,
the raise was 10% to 11 cents per share, while in the second quarter of the
year; it was 9.1% to 12 cents per share.
The Zacks #2 Rank (Buy) company saw an impressive 31% rise in adjusted
earnings per share to 55 cents in the second quarter of 2012 compared to 42
cents per share in the corresponding quarter last year. With this, profits
surpassed the Zacks Consensus Estimate by a penny. In absolute terms, profits
escalated 26.4% to $49.5 million compared with $39.2 million in the year-ago
Revenues increased 19.2% to $3.4 billion in the reported quarter, surpassing
the Zacks Consensus Estimate of 3.3 billion. The revenue growth was
attributable to a 20.9% increase in retail sales to 84,346 units.
Penske Automotive Group sells new and previously owned vehicles along with
finance and insurance products. It operates 340 retail automotive franchises,
providing 41 different brands and 30 collision repair centers. Apart from its
franchises in the U.S. and Europe, the company offers repair and maintenance
services to the brands it sells.
The company's product mix, including a wide range of imported and luxury
brands, helps it maintain a strong foothold in both the U.S. and international
markets. It competes with Lithia Motors (NYSE:LAD) and Sonic Automotive
(NYSE:SAH). The company will release its third quarter results on October 30.
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