Continued weaknesses in the advertising market have led ABN Amro to downgrade its 2001 and 2002 earnings per share forecasts for VNU by 4% and 10% respectively. The broker says that visibility for the business information group remains low as advertising in the business magazines sector is still weak.
VNU’s US magazine division saw revenues decline by 25% in July and August, whilst in Europe advertising deterioration is thought to have increased from a 12% fall in the first half to around 17% in July and August. The UK was particularly weak, with the IT magazines sector falling by 25% in the year to date.
In the longer term, ABN says that the acquisition of ACNielsen (see VNU In $2.3bn Deal To Buy ACNielsen) and the pending sale of its consumer publishing assets will substantially change VNU’s business mix and significantly improve its growth outlook.
| VNU change in forecasts |
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2000 |
Old 2001 |
New 2001 |
% Change |
Old 2002 |
New 2002 |
% Change |
| Total revenues (Euro million) |
3,385 |
4,987 |
4,984 |
-0.1 |
4,768 |
4,604 |
-3.4 |
| Earnings per share (Euro) |
1.7 |
1.81 |
1.74 |
-3.9 |
1.98 |
1.77 |
-10.6 |
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| Source: ABN Amro estimates |
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