* Earnings outlook lags modest revenue gains
* We’re investing in growth - CEO
* Doepfner committed to both classifieds, news divisions (Adds detail, share price reaction, sector context)
FRANKFURT, March 7 (Reuters) - Axel Springer forecast flat to slightly weaker earnings per share this year, sending its stock price to a two-year low as the German publisher prioritises investing in its digital transformation over profits.
Springer, best known as the publisher of the Bild tabloid, said adjusted earnings per share would likely decline this year even as it forecast revenue growth in the low- to mid-single digit percentage range.
“In 2019, we want to invest in growth to achieve a long-term increase in value,” CEO Mathias Doepfner said in a statement.
Shares in Springer tumbled 6 percent, extending their declines over the past year to more than a third as some investors took a dim view of its strategy at a time when competitors are restructuring to unlock shareholder value.
German broadcaster ProSiebenSat.1 Media said on Thursday that it expected a decline in earnings in the second and third quarters as it expenses investments in refreshing its entertainment offering.
Shares in ProSieben, which have also suffered steep declines of late, nonetheless gained 0.8 percent as the company confirmed guidance given in November for modest revenue growth this year and a slight decline in margins.
The plight of the German media houses contrasts with that of Norwegian publisher Schibsted, which is spinning off its fast-growing digital classifieds business via an initial public offering. Schibsted’s shares are up by nearly two-thirds over the past 12 months.
Springer, reporting 2018 results in line with expectations, said its digital classifieds and media properties were now contributing 70.6 percent of group revenues and 84.3 percent of core profits.
It forecast that revenues in its classifieds media segment - which spans jobs, property and car sites - would grow in the high-single-digit to low-double-digit percentage range, outpacing growth in core earnings.
In its news media segment, revenues would decline in the low single-digit percentage range while earnings before interest, taxation, depreciation and amortization (EBITDA) would be flat.
Doepfner said he was committed to developing both sides of the business. “In future we will concentrate on both pillars - classifieds media and news media,” he said.
Management proposed increasing the annual dividend by 10 euro cents to 2.10 euros ($2.37). ($1 = 0.8846 euros) (Reporting by Douglas Busvine, Editing by Tassilo Hummel and Susan Fenton)