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Andrew T. Gillies is Director of Communications at the Center for Audit Quality, an affiliate of the American Institute of CPAs, in Washington, DC. Based in Washington since 2002, he has also worked in editorial and communications roles at the Investment Company Institute, the World Bank, Forbes, and Vault.com. His policy-themed writing has focused on aerospace and defense, energy and environment, transportation, and financial services.

Wednesday, November 27, 2002

Have You Read The News?

Over the past 12 months, printing and publishing stocks in the S&P 500 have trounced the broader index by 37 points. Despite the runup, some stocks in the sector may still be attractive.

Take Dow Jones (nyse: DJ - news - people ), the financial news and information publisher. Its shares are down 33% from a 52-week high and have barely kept up with the broader market on a latest 12-month basis.

Dow Jones is suffering from the falloff in advertising, particularly from technology and financial services companies. For its most recently reported quarter, total revenue fell 11% year-over-year, advertising sales 16% and net income a wrenching 85%. Still, the company hasn't taken the hard times lying down. In 2001, it shaved $80 million from operating expenses; $70 million more in savings are expected for this year.

With 1.8 million subscribers, Dow Jones' flagship publication, The Wall Street Journal, remains the dominant business daily. If the overall advertising market rebounds, the company looks likely to benefit.

So is such a turnaround ahead for media companies like Dow Jones? Miles Grove, chief economist for The Barry Group, a Bethesda, Md.-based marketing and consulting firm to the media industry, predicts 2003 ad revenue growth of 5.9%. "Assuming we have no unexpected shocks," he cautions.

Full story at Forbes.com