J.P. Morgan Cuts New York Times to Neutral

Analyst Fred Searby says stonger advertising revenue isn't enought to offset higher costs and the weak economy

J.P. Morgan Cuts New York Times (NYT ) to neutral.

The New York Times posted 1.8% higher May advertising reveue in its newspaper group. Analyst Fred Searby says he thinks New York Times' national expansion should pay dividends long term, but believes the publishing company will face near-term challenges. He thinks New York Times faces economic challenges due to its exposure to help-wanted advertising, and the New York economy, where the labor markets are weak. The Times also faces growth in expenses, including newsprint.

Searby says circulation revenues grew 5% in the first quarter, but volumes fell to the low to mid-single digits in New York and Boston. He thinks volumes should stabilize in the second half of 2003 with easier comp-store sales, but the risk is that recent volume declines continue He sees $2.13 2003 earnings per share, and $2.38 for 2004.

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