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Our Outlook for Media & Telecom Stocks

Telecom offers relative stability, but old media is in big trouble.

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The media and telecom sector is a tale of two extremes. At one end, we've seen relative stability among telecom service providers and cable companies, especially in the U.S. and other developed markets. While growth for most telecom and cable firms has slowed modestly recently and will likely continue to do so into 2009, margins and cash flow have generally held up very well. At the other end, "old media" companies that depend heavily on advertising spending are falling deeper into despair, and telecom-equipment vendors face a bleak outlook for 2009.

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Michael Hodel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.