Falling Ad Revenues At FT Could Feature In Pearson Results
The downturn in the financial advertising market may have continued to effect revenues at the Financial Times and could in turn impact parent company Pearson’s results, due out on Monday, according to ABN Amro.
The broker notes that the FT is heavily reliant on advertising and that the experiences of the Wall Street Journal recently show that conditions are tough (see US Newspaper Groups Cut More Jobs). The French and Spanish editions of the FT are also likely to be suffering from the advertising recession and further downgrades are not out of the question.
Meanwhile, European broadcaster RTL, in which Pearson holds a 22% stake, is also a point of concern for ABN. The European broadcaster sector is suffering from a lack of visibility in advertising and revenues at RTL could, at the worst, come in flat for the year. This would knock ABN’s Pearson estimates down by 3% and RTL’s by 10-15%.
Following recent share price falls Pearson is trading well below its peer group at just 15x earnings and 8.8x EBITDA. Consequently, ABN has upgraded its stance on the group from Reduce to Hold.
