NEW YORK The New York Times Co. will keep turning the screws to tighten costs as the company — along with every other newspaper player — tries to weather the economic slump affecting newspaper advertising revenue.
Executives said during a Q2 earnings call that the company is looking to outsource more functions like IT as well as “pursuing other production efficiencies,” including at its Regional Media Group. Execs did not elaborate.
Second-quarter earnings fell 82 percent from a year ago, when the company saw a onetime gain from the sale of a unit, but print advertising continued to shrink and pulled down operating income, the publisher said Wednesday.
Net income dropped to slightly more than $21 million, or 15 cents per share, from $118.4 million, or 82 cents per share, a year ago.
The results for 2008’s second quarter include a charge of $15.7 million, or 11 cents per share, to cover staff buyouts. Like many publishers looking to curb spending, the company is reducing staff by 100 people this year and expects to incur up to $40 million in related costs.
Earnings from continuing operations slid 6 percent to $21 million, or 15 cents per share. Analysts polled by Thomson Financial expected a profit of 22 cents per share. At least some of the forecasts included an estimate for buyout charges.
Revenue fell 6 percent to $742 million and missed the Wall Street projection of $754 million. Ad revenue dropped 11 percent, hurt mostly by a continuing decline in classified advertising. Higher newsstand and subscription prices for the Times boosted circulation revenue 2.5 percent.
CEO Janet Robinson could not give much detail as to how July ad trends were shaping up, but she offered: “Many of the advertising budgets are tightening up. … We have to plan accordingly, which is exactly why we are continuing to focus on the cost-side of the business.”
This afternoon Goldman Sachs headlined its analysis of the Times: “Great franchise, lousy industry.”
It’s expected to be tough going for the second half of the year. Robinson declined to forecast 2009, but noted that the housing market is not expected to start a recovery until the latter half of 2009 at the earliest.
On the circulation front, the company said it was raising the newsstand price of its flagship paper from $1.25 to $1.50, effective Aug. 18. Robinson pointed out the increase in circulation revenue in Q2, up 2.5 percent, as evidence of the “strength” of The New York Times brand despite recent price hikes.
When asked to give an advance on circulation data for the six months ending September 2008, executives said only that the March 2008 statement was the last period to cycle against cuts in the other-paid category. Come the fall, Sunday circulation should outperform its prior drop of 9 percent this fall.
The Associated Press contributed to the report.