Axel Springer AG tumbled the most in about 10 months after the outlook for 2011 at the publisher of Bild, Germany’s most popular newspaper, fell short of analysts’ estimates.
The shares slid 5.4 percent after the Berlin-based company, which today reported a record annual operating profit, said it expects a “slight” increase in earnings before interest, taxes, depreciation and amortization this year.
“The outlook seems too cautious,” Jochen Reichert an analyst at Warburg Research, wrote in a note. “The sharp decline in the share price seems to be the result of the gap between analyst expectations for 2011 and the company’s outlook.” He rates the stock “buy” and predicts the stock will rise to 144 euros in 12 months.
Ebitda last year rose 53 percent to 510.6 million euros ($702.5 million) on fees for website content and more advertising. That was less than the average estimate of 519 million from 10 analysts polled by Bloomberg. The average Ebitda estimate for 2011 from analysts polled by Bloomberg was 564.5 million euros.
It is difficult to provide a more precise outlook for the current year Chief Financial Officer Lothar Lanz said at a press conference in Berlin today.
“If you look at the various institutes that give guidance for the advertising market, you see that some expect a slight increase, some a slight decrease, and so it is too early for us to give a concrete outlook,” he said.
Dividend, Stock Split
The decline in shares came even after Axel Springer proposed a record dividend of 4.80 euros a share for 2010 and a three-for-one split in its stock to draw more investors. Shares in the company are 52 percent owned by the Axel Springer Gesellschaft fuer Publizistik and 7 percent by Friede Springer, according to Bloomberg data.
Axel Springer had its biggest one-day drop since May 7 to 113.55 euros in Frankfurt. The shares have fallen about 7 percent this year, giving the company a market value of 3.74 billion euros. About 40.8 percent of the stock floats, with an average daily trading volume of 38,079 shares a day.
Newspapers and magazines owned by Axel Springer and competitors such as News Corp. and Time Warner Inc. are scrambling to follow their readers online to capture Web advertising revenue. The company gained advertising customers last year as the global economy recovered from the 2009 recession. Consumers have also become more willing to pay for entertainment and news online and on mobile devices.
The company’s sales last year increased 11 percent to 2.9 billion euros, propelled by a 51 percent jump in digital-media revenue as customers used the company’s applications on Apple Inc.’s iPad tablet. Revenue from outside Germany increased 29 percent, helped by acquisitions.
“The unabated continuation of our digitization and internationalization strategy during the crisis year of 2009 and anti-cyclical investments have paid off,” said Chief Executive Officer Mathias Doepfner in the statement.
Doepfner said digital and international activities will continue to drive growth in 2011, leading to an overall increase in sales, while German print brands will see a “slight decline” because of higher paper prices.
In the final quarter of last year, French regulators approved Axel Springer’s tender offer for property-classifieds portal SeLoger.com. Axel Springer said yesterday it holds 74.2 percent of SeLoger.com.
The company also bought stakes in automotive classified-advertising and lifestyle-marketplace portals in India and acquired a Hamburg-based portal operator.