Posted on 07/18/2006 1:23:36 PM PDT by abb
Will close plant and cut 250 jobs; CFO to retire in 2007
By David B. Wilkerson, MarketWatch Last Update: 1:05 PM ET Jul 18, 2006
CHICAGO (MarketWatch) -- New York Times Co. reported that second-quarter profit was about flat with the year-earlier period due to expenses related to job cuts it announced last September, as well as continued weakness in the advertising market.
The newspaper publisher (NYT) also said Tuesday that it will cut about 250 production-related jobs as it consolidates its New York metro printing operations into a single facility and shrinks the width of The New York Times by one and a half inches.
On a busy news day for the company, it also said Chief Financial Officer Leonard Forman will retire in 2007 and that it retained an executive-search firm to find his successor.
New York Times Co.'s second-quarter net income was $61.3 million, or 42 cents a share, compared with $60.8 million, or 42 cents, in the year-earlier quarter. The latest figure includes an after-tax charge of $5.3 million, or 4 cents a share, associated with the September staff reduction.
The company expects charges for severance and buyouts tied to the latest consolidation but doesn't yet know how much they'll be or when it will book them.
Excluding the item, New York Times earned 46 cents in the latest three months.
Revenue rose 1.6% to $858.7 million from $845.1 million.
Analysts polled by Thomson First Call were expecting profit of 44 cents a share on revenue of $863.9 million. Advertising, circulation and other revenue at The New York Times Media Group and the Regional Media Group rose in the quarter, partly because of new products, Janet L. Robinson, president and chief executive, said in a statement.
Ad revenue rose 1%. The company said it was hurt by the timing of Easter, which fell in April this year rather than March. Overall advertising typically declines on the holiday, mostly as classified ads drop off.
June's ad revenue was up just 0.7%, and Robinson sounded a note of caution about July. So far this month, she said, "advertising has been challenging, especially in categories such as studio entertainment, automotive and corporate, where we are experiencing declines."
Analyst Paul Ginocchio at Deutsche Bank Securities said Tuesday that his previous July newspaper ad growth projection of 1.8% now seems "too optimistic."
On a conference call with analysts, Robinson said it's too early to tell if July ad growth will actually be negative compared with the same month a year ago. "We're still seeing opportunities in the last two weeks," she said, as well as "very strong growth" in online ads.
Prudential's Steven Barlow told clients that nothing in the earnings report "makes us want to own the stock." He maintained his underweight rating and $23 price target.
New York Times shares recently were down 2.9% at $22.50. Newsprint expense, which has been growing throughout the industry for some time, rose 7.4% in the second quarter over the prior year.
At the New York Times Media Group, which includes the flagship publication, revenue rose 2.5% to $515.5 million. Advertising revenue at the unit was up 1.4% to $316 million. Circulation revenue was up 2.8% to $157.6 million.
Robinson said the unit benefited from the redesign of NYTimes.com, which provided better placements for advertisers.
Strong ad categories included classified real estate, which was helped by larger inventories of homes to sell, telecommunications, and transportation. Automotive advertising, soft throughout the industry, was down, along with entertainment, which was hurt by "poor holdover in the box office and lackluster support for summer blockbusters."
At the New England Media Group, which includes the Boston Globe, problems persisted, as total revenue fell 8.1% to $160.5 million, as ad revenue fell 10.4% to $108.6 million. Circulation dipped 7.2% to $40.3 million.
The company has no plans to sell any of its New England properties, despite the weakness, Robinson said on the call. Asked if certain recent newspaper sales had given New York Times Co. any ideas about its New England assets, Robinson said the unit, which also includes Boston.com and the Worcester Telegram & Gazette, is still "a very strong element" in the company's portfolio. At the regional media group, including papers in such medium-sized markets as Wilmington, N.C. and Santa Rosa, Calif., ad revenue rose 5.3% to $96.3 million, while circulation was up 0.4% to $21.8 million.
About.com, the online information provider New York Times Co. acquired last year, saw revenue soar 63% to $19.4 million. The company expects About.com to add to its earnings in 2006.
Revenue generated by New York Times Co.'s Internet-related businesses, including About.com and Web sites tied to its newspapers and television stations, jumped 35% to $66.1 million. Online business accounted for about 7.7% of the company's total revenue, up from 5.8% in the second quarter of 2005.
As more readers get their news and other information from the Web, newspaper publishers are seeing their online revenues increase dramatically. The bigger the percentage of total revenue generated by online businesses, the easier it will be for the newspaper industry to convince Wall Street that it isn't merely cannibalizing its existing print readership, which is on the decline, but growing its total audience.
Broadcasting revenue rose 5.2% to $39.1 million.
New York Times Co. said it expects to save more than $42 million a year by consolidating its New York metro printing operations. Severance and other consolidation costs will result in charges, though the company has yet to determine their scope and timing. End of Story
David B. Wilkerson is a reporter for MarketWatch in Chicago.
ping
I am sure their unions will help out in these troubled times...
From the stories earlier today reporting the printing plant layoffs, you will see that the union members are the ones taking the brunt of the layoffs...
http://www.freerepublic.com/focus/f-news/1667630/posts
In other news, bankruptcies and mortgage defaults by people who used to work for newspapers and who can't find jobs in the real world are on the increase...
Hooray......I don't read the Times and I will continue to boycott their advertisers.....doesn't do much, but it makes me happy.
I like to take the NY Times subscription mailers (litter) and send them back just to have them spend the $1-$3 to process. Life is filled with simple pleasures I guess?
Excellent!
From Marketwatch:
Updates, advisories and surprises
******************************************************
N.Y. Times Co.: No plans to sell any New England properties (11:46 AM ET) CHICAGO (MarketWatch) -- New York Times Co. (NYT : New York Times Company
Last: 22.67-0.51-2.20%
4:26pm 07/18/2006
Delayed quote data
NYT22.67, -0.51, -2.2% ) has no plans to sell any of its New England properties, despite persistent and steep advertising and circulation declines at the unit that includes the Boston Globe newspaper, Chief Executive Janet Robinson told analysts on a conference call Tuesday. For several quarters, the company's New England Media Group has suffered significant revenue declines, including an 8.1% drop in the second quarter. Asked if certain recent newspaper sales had given New York Times Co. any ideas about its New England assets, Robinson said the unit, which also includes Boston.com and the Worcester Telegram & Gazette, is still "a very strong element" in the company's portfolio. Many advertisers in the region, she added, consider the Globe and the other publications "must buys" when trying to reach local consumers.
Thanks Ernest.
It might help them to tell the truth once in a while.
I do that with the sub blow-ins from the library's copy of "The Nation".
Rush was all over the upcoming closing of the printing shop by the NY Slimes today. Nothing like pitting Union Thugs against elite Homosexual owners and top management of the Ny Slimes.
Somewhat presumptuous of the Slimes to accuse Christ of arising on the 3rd day just to ruin its ad revenue, doncha think?
I heard that. What's the blog or site that he referenced?
Dang, if I could have put off lining my bird cage just ONE DAY, we could have had them in the red!
No one competent on staff to take over.
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