Reuters: Hot Stocks: UPDATE 2-Springer sees earnings hit by investment and restructuring costs

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UPDATE 2-Springer sees earnings hit by investment and restructuring costs Mar 6th 2013, 10:24 Wed Mar 6, 2013 5:24am EST * Sees 2013 EBITDA down by as much as 9 percent * 2013 revenue to be up as much as 5 pct * Posts FY EBITDA of 628 mln euros vs 619 mln expected * Shares down more than 4 pct, underperform sector (Adds CEO comment, details, background, shares) By Harro Ten Wolde FRANKFURT, March 6 (Reuters) - German publisher Axel Springer has warned of a sharp drop in earnings this year, as it bears the costs of investing in its digital businesses and restructuring its declining print operations. Springer, which publishes Germany's largest selling daily "Bild", said on Wednesday it expects core earnings or EBITDA to drop by as much as 9 percent and foresees a significant drop in net income, sending its shares down more than 4 percent. The warning is the latest sign that a slowing economy has finally hit advertising and circulations in the print media in Germany, after Europe's largest print media market had proven relatively resilient to the technological and demographic forces that have squeezed newspapers in many other developed countries. Publisher Gruner + Jahr (G+J), controlled by media conglomerate Bertelsmann, closed its Financial Times Deutschland (FTD) title last year, while left-leaning Frankfurter Rundschau was last week saved by conservative rival Frankfurt Allgemeine Zeitung. Springer CEO Mathias Doepfner said the company had no plan to cut jobs in its print business, adding that the restructuring costs were part of a continuing search for efficiency improvements in the unit. Springer is also having to inject further investment into its online activities, having been one of the first German companies to make a move into digital media and away from print. "We continue to expect organic growth in our digital media, strengthened by acquisition effects, while the revenues of our national and international print media are expected to decline further, in line with market trends," the company said. The group's digital media offerings - including web-based versions of its newspaper titles, as well as stakes in property and job sites - last year contributed more than a third to Springer's top line, with revenue from digital rising 10.5 percent from last year to 1.3 billion euros. Its forecast of lower earnings - which came despite a forecast that sales will rise by as much as 5 percent in the current year - was a shock given that analysts had expected core earnings to rise 4 percent to 653 million euros ($850.6 million). Yet the forecast of higher sales was slightly ahead of a previously predicted rise of 4 percent. Axel Springer had also reported a 5.8 percent rise in 2012 EBITDA to 628 million euros, driven by its digital media, beating the average forecast of 619 million in a Reuters poll. Its shares were down 4.2 percent at 34.76 euros by 0945 GMT, among the day's biggest decliners in a European media sector which was up 0.2 percent. Trading volume in the stock was twice as high as the 90-day average. The shares are still up 8 percent so far this year, while its sector peers have won 6 percent. ($1 = 0.7677 euros) (Editing by David Holmes) Link this Share this Digg this Email Reprints

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