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Schibsted Drops as Online Switch Cuts Profit Outlook: Oslo Mover

Schibsted ASA, Norway’s largest media company, fell the most in two years in Oslo after higher spending on online classified sites signaled a slowing of profit growth.

Schibsted slumped as much as 8.6 percent, the most since March 15, 2011, and traded 4.8 percent lower at 242.5 kroner as of 11:35 a.m. That makes it the biggest decliner on the Stoxx Europe 600 Index after National Bank of Greece SA.

Schibsted is expanding its online business as readers forgo traditional print media, leading to a decline in newspaper circulation. The company’s web-based operations, which include Leboncoin.fr, that’s one of France’s 10 most-visited websites, contributed 45 percent of first-quarter revenue, up from 37 percent a year earlier, it said today.

Spending on the move to online publishing cost 100 million kroner ($17.2 million) more than expected in the first quarter, Carnegie ASA analyst Preben Rasch-Olsen wrote in an e-mail.

“If this quarter represents the going rate per quarter,” the broker’s estimate for earnings before interest, tax, depreciation and amortization will have to be reduced by 15 to 20 percent while “consensus will come down 10 to 12 percent,” Rasch-Olsen wrote.

Schibsted, which owns Aftenposten, Norway’s largest newspaper, and Swedish tabloid Aftonbladet, plans to spend 500 million kroner to increase revenue as it tries to replicate the success of its Finn.no, Blocket.se and Leboncoin.fr websites in nations including Malaysia and Brazil.

Soft Side

“The problem is the size of the investment in a quarter when both Leboncoin and Finn are a bit on the soft side,” wrote Rasch-Olsen, who has a buy recommendation on the stock.

Schibsted earlier today posted first-quarter Ebitda of 274 million kroner, missing the 401.3 million kroner average of eight analyst estimates compiled by Bloomberg. The Ebitda margin at Finn dropped to 44 percent from 48 percent, while at Blocket it declined to 47 percent from 52 percent.

At Leboncoin, the margin rose to 70 percent from 69 percent, with underlying revenue growth of 33 percent, Schibsted said. That’s below the 40 percent level that was expected, Rasch-Olsen said.

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