Printing Profits Dive as Large Printers Have Massive Writedowns - Industry Data Analysis from WhatTheyThink: Printing Profits Dive as Large Printers Have Massive Writedowns
By Dr. Joe Webb
Published: December 22, 2015
The third quarter of 2015 marked a huge divergence in the performance of the industry, according to the Department of Commerce Quarterly Financial Report. Printers with more than $25 million in assets wrote down assets amounting to nearly -15% of revenues. This sent the quarterly moving total of inflation-adjusted profits before taxes to +$1.46 billion.
The table shows that smaller print businesses did much better. The demarkation by assets at $25 million in assets is roughly equal to the split of establishments with 100 employees or more. These larger printers with 100+ employee have been the specialists in high volume catalogs, magazines, newspaper inserts, and numerous other high circulation materials. The consolidation activities in this segment of the industry have been constant, driven by the shift to digital alternatives and the rising costs of distribution, especially postal costs.
Printers smaller than the largest have been performing much better. Over the last five quarters, the category of those with less than $25 million in assets have had an average profit before taxes of more than 6%.
We will have more details of these data including a longer historical analysis when WhatTheyThink resumes its full publishing schedule in 2016. Check the site for breaking news during the break.
