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Tuesday, August 28, 2007

Market Goes Negative on NY Times

This is big.

Moody's changes New York Times outlook to 'negative'
Moody's Investors Service on Monday affirmed the New York Times Co.'s senior unsecured and Prime-2 commercial paper ratings and changed the rating outlook to negative from stable. The agency said the negative rating outlook results from "increased pressure on the company's retail and classified advertising from cross media competition and the downturn in the housing market." Shares of New York Times fell 35 cents to close at $22.10 on Monday.
For those of you not familiar with how rating agencies work, this is big news. They don't change a rating to negative over minor changes and the stock price is already plummeting on the market.

More from Fortbes.
The negative rating outlook is a result of the increased pressure on the company's retail and classified advertising from industry competition and the downturn in the housing market, Moody's said.

"These pressures along with the 31 percent increase in the company's quarterly dividend in March 2007, tax payments on recent asset sales and continued heavy capital spending through early 2008 will challenge the company's ability to generate sufficient free cash flow" required to reduce debt-to-earnings ratio in 2008 to the level previously anticipated, Moody's said.

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