The New York Times Co. on Thursday joined the band of newspaper publishers defying Wall Street expectations by posting second-quarter profits in the face of deteriorating advertising revenue.
The Times Co. said its second-quarter net income was $39.1 million, or 27 cents a share, compared to $21.1 million, or 15 cents a share in the year-ago period. In the first quarter of this year the Times Co. posted a loss of $74.5 million, and the consensus among analysts was that the company would post another loss, of about 4 cents a share, this quarter.
Profits were pumped up by a favorable tax adjustment that added 26 cents a share and some other special items, including a severance charge that cut the earnings by 11 cents a share.
But for investors wary of the newspaper sector the Times results are likely to be taken as more evidence that the newspaper industry is at or near the bottom of the steep fall-off in advertising.
Like Gannett Co., The McClatchy Co. and other chains who have already reported second-quarter results, the Times Co. said overall and ad revenue plunged by double-digit percentages.
Total revenue fell 21.2 percent from a year ago to $584.5 million -- and advertising revenue tumbled 30.2 percent.
Circulation revenue was up 1.5 percent on single-copy and home-delivery increases that stuck.
The story behind the Times Co. profits was the deep cut in operating costs, which fell 20 percent to $561.2 million.
Newsprint expense declined 24.5 percent, with lower consumption accounting for 22.8 percent and 1.7 percent.
"While we continued to experience a very difficult economic climate in the quarter as well as secular changes affecting the entire media industry, we made significant progress in decreasing our cost base and reducing and restructuring our debt," President and CEO Janet Robinson said in a statement.
She said the company had seen rate of decline in advertising revenue moderating throughout the quarter.
The plunge in advertising was led by classified, which fell 45.5 percent on weakness in all major categories. Echoing the results of other publishers, the Times Co. reported huge declines in help-wanted, down 60 percent, real estate, down 47.6 percent, and automotive, down 43.2 percent.
Operating profit from its newspapers group, excluding special items, fell to $60.9 million, compared with $99.2 million a year ago. Falling ad revenue accounted for nearly all the difference, the company said.
Total Internet revenue fell 14.3 percent to $78.2 million in the quarter, with Internet ad revenue down 15.5 percent. But digital revenue now accounts for 13.4 percent of total company revenue, up from 12.3 percent a year ago.
Nielsen Business Media