Reuters logo
Springer's outlook seen too vague, shares drop
March 2, 2011 / 2:01 PM / 7 years ago

Springer's outlook seen too vague, shares drop

FRANKFURT/BERLIN (Reuters) - Axel Springer AG (SPRGn.DE) posted results that fell short of expectations on Wednesday and gave an outlook that analysts said was too vague and too cautious, sending its shares down some 10 percent.

Chief Financial Officer Lothar Lanz told reporters core profit at the publisher of Germany’s best-selling tabloid Bild would increase in a double-digit percentage range this year, but gave no actual figures.

“In light of potential for price increases in print activities and structural growth in online and classifieds as well as economic tailwinds, the outlook seems too conservative,” Jochen Reichert, analyst at Warburg Reserach, said.

Shares of Springer, whose titles also include Die Welt, fell as much as 10.6 percent, reaching a four-month low, and were trading 5.6 percent lower at 113.30 euros by 1327 GMT, while the German mid-cap index .MDAX was down 1.8 percent.

The group, founded in 1946 by journalist Axel Springer, said it expects earnings to increase this year, without elaborating.

“This is weighing on the share price. Investors want numbers and specifics for the outlook, and if they don’t get them they don’t know what they’re letting themselves in for,” a Frankfurt-based trader, who declined to be named, said.

INTERNATIONAL GROWTH

Axel Springer is banking on business outside its German home market to shore up earnings this year. The Berlin-based publisher said it expects growth in its international print business and its online segment to compensate for a slight decline at its domestic magazines and newspapers.

The group posted a core profit of 510.6 million euros ($705.4 million) for 2010, below the analyst average of 524 million, while sales grew 10.8 percent to 2.89 billion, in line with forecasts.

It said it plans to raise its dividend to 4.80 euros per share from 4.40 euros.

Springer has been on a shopping spree to strengthen its international and digital position and said it had acquired German advertising company Kaufda without giving financial details.

It recently also acquired the majority in French online ad company SeLoger SLGC.PA and a year ago boosted its eastern European operations through a joint venture with Switzerland’s Ringier.

International sales generated almost a third of total group sales in 2010. Advertising revenues rose 21.6 percent.

Springer said it was not necessary to buy more business as it was well positioned to grow on its own. “We have enough room to finance further growth but we are confident that we can increase revenue in 2011 without acquisitions, too,” Lanz said.

Asked about media reports that Springer is interested in buying a stake in German commercial broadcaster ProsiebenSat.1 PSMG_p.DE, Chief Executive Mathias Doepfner said there was absolutely nothing to it.

Springer had agreed to buy ProSieben in 2005 for 2.5 billion euros, but it pulled out in face of anti-trust concerns from Germany’s regulator.

Editing by David Holmes

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below