NYT Meets Wall Street Expectations

NEW YORK — New York Times Co. Wednesday reported second-quarter results in line with Wall Street estimates, reflecting a severe slump in advertising. The newspaper publisher held out hope for an upturn late in the year.
New York Times’ net income more than doubled to $265.5 million from $101.7 million in the year-earlier period. The latest period included a one-time gain of $241.3 million for the sale of its golf properties, and charge of $47.1 million for work-force reductions.

Excluding items, earnings fell 31% to $70.5 million, or 44 cents a diluted share, a penny above a consensus estimate of analysts surveyed by Thomson Financial/First Call. In the 2000 quarter, the company had a profit excluding items of $101.7 million.

Advertising revenue declined 16% to $520.2 million from $617.8 million a year earlier, while total revenue decreased 10% to $760.3 million from $843.5 million.
“Our second-quarter results reflect continued weakness in advertising due to the slowdown in the U.S. economy as well as the cycling through of dot-com and technology advertising,” Russell T. Lewis, president and chief executive, said in a prepared statement.

Mr. Lewis said the company has moved aggressively to address the revenue decline and cut overall costs, adding that if the economy picks up as expected, full-year earnings of $2.07 to $2.15 a share are achievable. Failing an economic upturn, the company will “at least meet the current consensus estimate” of $1.98 a share cited by First Call, he said.

The company plans to cut 8% to 9% of its staff during this year. At the end of last year, its full-time work force stood at 14,000. The company said it will save $35 million to $40 million from the job cuts in 2001 and expects annual savings of about $80 million to $90 million.

The drop in revenue was led by the sharp slide in advertising revenue. The company’s newspaper group, which includes the Boston Globe, accounted for 93% of total revenue, with 5% attributed to the broadcast unit and 2% to the company’s Internet unit, New York Times Digital.
Advertising revenue at the company’s core newspaper group dropped 16% to $474.3 million from $566.7 million in the year-earlier period. Total revenue at the newspaper division dropped 10% to $709.1 million from a year earlier, after rising 14% to $787.5 million in a prosperous 2000 quarter.

Broadcast revenue for the latest quarter slipped 6% to $38.7 million from $41.3 million a year earlier, mainly due to sluggish advertising, especially for automobiles and packaged goods. Second-quarter broadcast operating profit fell 12% to $12 million from $13.6 million.

Revenue for New York Times Digital decreased 12% to $15.3 million from $17.5 million. A falloff in online display advertising, particularly in the dot-com and technology sectors, was only partially offset by growth in classified advertising revenue, which rose 39% in the quarter.

Copyright (c) 2001 Dow Jones & Company, Inc.