New York Times Co. has 3Q profit, reverses loss

[October 21, 2011]  NEW YORK (AP) -- The New York Times Co. turned a profit in its fiscal third-quarter, helped by reduced costs and higher circulation revenue that offset a decline in advertising. The company was also aided by a partial sale of its stake in the Boston Red Sox and other sports properties.

The results sent the company's stock up 58 cents, or 8.9 percent, to $7.10 in afternoon trading, with investors satisfied with the company's efforts to cut costs and bring in digital subscribers. Year-to-date, though, the stock is still down nearly 30 percent.

The publisher of The New York Times, The Boston Globe and other newspapers earned $15.7 million, or 10 cents per share, in the July-September period. That's up from a net loss of $4.3 million, or 3 cents per share, a year earlier.

The Times' focus on selling subscriptions to its digital version is starting to pay off. Circulation revenue rose 3 percent, as the introduction of digital subscriptions at its flagship newspaper offset a decline in print sales of its newspapers. The company ended the quarter with 324,000 paid digital New York Times subscribers, up 45 percent from 224,000 subscribers as of June 26. It introduced digital fees in March.

The company expects circulation revenue to increase in the "low- to mid-single digits" in the fourth quarter from the third. Without giving numbers, it said it saw total advertising revenue trends "improve modestly" in the first half of October compared with the third quarter.

Excluding special items, earnings were 5 cents per share in the latest quarter, above the 3 cents that analysts polled by FactSet were expecting. This figure excludes a gain of $37.8 million from the Times' sale of the Red Sox and other sports holdings, as well as severance costs and a charge of $27.5 million from the company's early repayment of $250 million high-interest loan from Mexican telecommunications billionaire Carlos Slim.

Revenue fell 3 percent to $537 million compared with analysts' expectations of $543.1 million.

Total advertising revenue, which includes the Times' newspaper properties, About.com and other Web properties, fell nearly 9 percent. The Times said advertising revenue at its newspaper properties fell 7 percent, hurt by a 10 percent drop in print ad revenue.

Results from the Gannett Co. earlier this week signaled that the newspaper advertising slump is deepening, a disheartening sign for industry executives and investors who entered this year believing the worst was over.

The Times, though, met earnings expectations while reporting a "rather surprisingly big cut in costs," said Edward Atorino, newspaper industry analyst at Benchmark Co. Total operating expenses fell 4 percent during the quarter to $504.2 million from $522.9 million.

"To put it another way, it wasn't a disaster," he said.

[Associated Press; By BARBARA ORTUTAY]

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