Pearson Downgraded As FT And RTL Outlooks Deteriorate
s share prices continue to tumble at Pearson, both Morgan Stanley Dean Witter and ABN Amro have downgraded their outlooks for the media group.
Much of the fall in Pearson’s figures comes from European broadcaster RTL, in which Pearson holds a 22% stake. RTL yesterday reported an interim loss of ₏2.2 billion (see RTL Postpones Float As Results Are Hit By Ad Slowdown), the largest pre-tax interim loss of any European media company, according to the group. The outlook for RTL and the European broadcasting subsector remains poor. Further problems for Pearson come from declining advertising volumes at FT Group.
ABN has knocked back its earnings per share (EPS) estimates for 2001 by 9% and for 2002 by 17%. Morgan Stanley concurs, with EPS cuts of 8% and 17% for 2001 and 2002 respectively.
ABN says that the FT Group is extremely sensitive to an advertising recession and weaknesses in the macro environment. Poor figures from the Wall Street Journal recently indicate cause for concern, say analysts (see US Newspaper Groups Cut More Jobs). FT Group operating profit forecasts have been cut by 9% and 21% for this year and the next.
At 11:00am today, shares in Pearson were down 18p at 712p.
