The New York Times Company swung to a profit in the second quarter on
stronger circulation revenue and lower operating costs, but continued
weakness in advertising weighed on results.
¶
The company reported on Thursday that net income rose to $20.1 million,
or 13 cents a share, from a loss of $87.6 million, or 58 cents a share,
in the period a year earlier.
¶
Last year’s second-quarter results were hurt by write-downs related to
the sales of About.com and the company’s regional newspaper group.
Excluding those items, income from continuing operations was $20.1
million, compared with $38.1 million in the period a year earlier.
¶
Total revenue for the quarter declined less than 1 percent, to $485.4
million, from $489.8 million in the second quarter of 2012. Circulation
revenue rose 5.1 percent, to $245.1 million, from $233.3 million. But
that gain was largely offset by a 5.8 percent decline in advertising
revenue, to $207.5 million.
¶
Print advertising at the company’s newspapers, which include The New
York Times, The Boston Globe and The International Herald Tribune,
declined 6.8 percent, and digital advertising fell 2.7 percent. Digital
advertising now accounts for 24.7 percent of the company’s total
advertising revenue.
¶
Operating costs declined 3.1 percent, to $431.9 million, from $445.7
million, mainly because of lower compensation and benefits costs,
according to the company.
¶
“Our improved results in the second quarter were an organizationwide
effort — with contributions from more favorable revenue trends and
strong cost performance,” Mark Thompson, the company’s president and
chief executive, said in a statement.
¶
The number of paid subscribers to the Web site, e-reader and other
digital editions of The Times and The International Herald Tribune grew
to 699,000, a jump of more than 35 percent from the period a year
earlier. Digital subscriptions to The Boston Globe and BostonGlobe.com
rose to 39,000, an increase of nearly 70 percent from 23,000 a year
earlier.
¶
Alexia S. Quadrani, an analyst at JPMorgan Chase, said that while she
was pleased with the results, she was also aware of the challenges
newspapers were facing.
¶
“As nice it is to see slightly better-than-expected numbers, the fact
that we are many years into these declines and they still persist just
shows you the secular challenges this industry is facing,” said Ms.
Quadrani. “The New York Times has a successful digital platform to help
offset some of the ongoing newspaper advertising weakness. It’s still a
headwind you’re going to try to offset every day.”
¶
Since Mr. Thompson joined The Times in November, he has focused on
rebranding The Times as a global operation. In February, the company
announced it would sell the New England Media Group, which includes The
Boston Globe, Boston.com, The Worcester Telegram & Gazette and Globe
Direct, a direct-mail marketing company. Bids for the properties were
due in July but a sale has not been announced.
¶
The Times also announced in February that it would rename The
International Herald Tribune, its 125-year-old newspaper based in Paris,
The International New York Times. It also will unveil a new Web site
for international audiences in the coming months.
¶
The company has also continued to increase its plans to charge readers
for content. In June, the company started to charge nonsubscribers who
want to read more than three articles a day on The New York Times apps
for mobile devices.
¶
“We are making good progress and are on track with our strategic growth initiatives,” Mr. Thompson said. “In
particular, we are well under way in the ramp-up for the fall rebrand
of The International Herald Tribune as The International New York Times
and with the development work related to our new paid products.”
Source: NYTIMES
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