"Things have bottomed in the advertising market," said Peter Appert, newspaper and publishing analyst at Deutsche Bank Alex. Brown, New York. He cautioned: "This is not to say that business is booming, by any means-but it's getting better."
But last week saw more positive signs-helped partly by easier comparisons with a disastrous 2001 first quarter (AA, March 11). Radio showed its first up month in a year, newspapers are reporting smaller monthly lineage drops and TV networks see second-quarter sales improving.
Following a 12-month slide, radio revenue reached positive territory in January, thanks to easier comparisons. Combined national and local radio ad sales rose 1% over January 2001; local revenue was up 1% and national 2%, according to the Radio Advertising Bureau.
In a research report issued last week, UBS Warburg media analyst Leland Westerfield upgraded his 2001 U.S. ad spending forecast to call for an increase of 0.7%, up his previous call of a 1.6% decrease, led by a 5% increase in spot TV spending, which was previously forecast to grow by 5% and flat network TV spending, instead of a 3% drop.
The Conference Board's monthly help-wanted index held stable in January after rising in December. After a year of monthly drops, this was the first indication that newspaper advertising may be ready to turn a corner.
While this period looks encouraging, more companies reported weak results for last quarter.
Grey Global Group posted a net loss of $24.4 million for 2001 and $28.6 million for the fourth quarter vs. net income of $19.4 million and $3.4 million, respectively, in 2000; losses were due to a $32.2 million write-down of online investments. H.J. Heinz Co., Pittsburgh, reported third-quarter earnings of $201.7 million, down 25.4%, citing low sales in pet products, seafood and food- service as well as currency effects.
CKE Restaurants, parent of fast-food chains Hardee's and Carl's Jr., reported improving results as part of a turnaround effort, with a net loss of $8.3 million for the fourth quarter and $84 million for the year, compared with losses of $148.3 million and $194.1 million for the same periods a year ago.
contributing: cara b. dipasquale
Companies reporting earnings next week:
March 18: Morgan Stanley Dean Witter & Co., Kmart Corp.
March 20: General Mills, Interep National Radio Sales
March 21: Borders Group, Carnival Corp., Triarc Cos.