Amid the secular and cyclical slowdown in print advertising The New York Times Company (NYT) recently reported third-quarter 2009 results that topped the Zacks Consensus Estimate.
The New York Times quarterly earnings of 16 cents a share surpassed the Zacks Consensus Estimate of 2 cents, and the prior-year quarter earnings of 5 cents. The better-than-expected results came on the heels of significant cost-cutting measures and newspaper price increase.
On a reported basis, including one-time items, the company reported a loss of 25 cents a share, a substantial improvement from the loss of 74 cents delivered in the year-ago quarter.
Management now expects to save $475 million in operating costs in 2009 up from $450 million previously anticipated. Operating costs fell 21.6% to $490 million, whereas operating profit surged 30.2% to $80.6 million.
Total revenue dipped 16.9% to $570.6 million, primarily due to lower print advertising. Total advertising revenue tumbled 26.9% to $291 million, whereas circulation revenue rose 6.7% to $240.8 million due to higher subscription and newsstand prices.
Like The New York Times, other newspaper companies like Washington Post Company (WPO), Journal Communications (JRN), Gannett Co. (GCI) and McClatchy Company (MNI) have long been grappling with the slump in print advertising demand amid the global meltdown, as advertisers are migrating to the Internet driven by increasing online readership and lower ad prices than print.
This has compelled many newspaper companies to lower headcount, pay cuts, furloughs and close printing facilities. The companies are now even considering charging readers for online content.
The New York Times recently announced plans to trim newsroom staff by 8% or nearly 100 jobs by the end of the year through buyouts or layoffs. The company recently sold its New York City classical radio station, WQXR-FM, for $45 million, and plans to sell its minority stake in the New England Sports Ventures that owns the Boston Red Sox baseball team and related cable television properties. The proceeds will be utilized for debt repayment.
By segment, News Media Group revenue slipped 18% to $539.8 million due to lower print advertising. Advertising revenue plunged 29.6%, as print advertising fell 31.2% and online advertising dipped 18.5%. The About Group segment’s revenue jumped 7.2% to $30.8 million due to increase cost-per-click advertising.
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Read the full analyst report on “MNI”
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