New York Times reports higher revenue, stock jumps

[July 27, 2012]  NEW YORK (AP) -- The New York Times Co. stock rose sharply on Thursday after the media company reported that second-quarter revenue increased slightly.

Most of the revenue gain at the company, which publishes The New York Times and Boston Globe, stemmed from higher newspaper circulation, especially in its digital editions.

Revenue rose less than 1 percent to $515.2 million from $512 million. Analysts were expecting revenue of about $511 million. The last time the Times saw revenue grow was in the second quarter of 2010, when it increased by 1 percent to $589.6 million from $582.7 million.

The company's stock rose 75 cents, or 11 percent, to close at $7.80 on Thursday. The stock has traded between $5.50 and $8.92 in the past year.

Overall, the company said it lost $88.1 million, or 60 cents per share, in the April-June period, largely due to a one-time charge it made for the declining value of its About.com business. In the same period a year ago, the Times took a one-time charge to reflect the declining value of its regional newspaper division. It lost $119.7 million, or 81 cents.

The one-time charge amounted to $126.1 million, or 85 cents. Excluding the one-time charge and other items, the Times would have earned $21.5 million in the latest quarter.

Adjusted earnings were 14 cents per share in the latest quarter, up from 11 cents per share in the second quarter of 2011. Analysts, on average, were expecting adjusted earnings of 13 cents per share on revenue of $510.7 million, according to FactSet.

The company said strength in both print and digital newspaper circulation helped to offset advertising revenue declines.

Total company circulation revenue, which includes The New York Times, The Boston Globe and the International Herald Tribune, rose 8 percent. Circulation revenue at the company's flagship newspaper grew 11 percent.

The Times Co. continued to see growth in digital subscriptions, thanks to a so-called electronic paywall system it erected in March of 2011. Under the system, the Times charges readers for monthly access to an unlimited number of articles. The strategy, closely watched by executives in the industry, has helped to boost the Times' circulation and is being adopted at other newspapers. In April, the Times cut the number of articles readers can access for free from 20 to 10 per month.

At the end of June, the Times Co. had roughly 532,000 digital subscribers, a gain of 13 percent from the 472,000 it had March 18, 2012, which was the one-year anniversary of the company's digital subscription launch.

The Times Co. said that its advertising revenue decreased 7 percent to $244.3 million from $262.1 million and circulation revenue rose 8 percent to $233.3 million from $215.3 million. Revenue from other businesses such as commercial printing, news syndication and digital archives, increased 9 percent to $37.7 million from $34.5 million.

Revenue at the About Group declined 9 percent to $25.4 million in the second quarter. About.com offers users guides and other content on topics such as parenting, health care and cooking. Most of its users arrive at About's content through search engines.

The Times said About's ad revenue declined and said competition and the uncertain economy offset progress the company had made rebuilding About.com's sales team.

Chairman and CEO Arthur Sulzberger Jr. said that despite the accounting charge, the "About Group continues to execute on its turnaround strategy and we expect it to be on track to post continued meaningful improvement in the second half of the year."

[Associated Press; By BARBARA ORTUTAY]

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