Posted on 06/18/2003 11:33:07 PM PDT by LdSentinal
NEW YORK, June 18 (Reuters) - The New York Times Co. NYT.N warned on Wednesday its second-quarter profit would fall short of Wall Street expectations, and also cut its full year outlook, citing Iraq war costs and fewer travel-related advertisements.
The newspaper publisher, rocked last month by a reporting scandal, saw its shares drop nearly 8 percent after it blamed the lower outlook on the post-war hangover, higher newsprint prices and fewer travel-related ads due to the worldwide SARS scare.
Its shares ended down $2.91, or 6 percent, at $45.63 in Wednesday trading on the New York Stock Exchange.
"Our advertising results in May, as well as results thus far in June, reflect a modest improvement from the year-over-year declines we experienced during March and April, which were caused primarily by the war in Iraq," the company said in a release.
Also hurting the company's stock before the warning was a JP Morgan downgrade to "neutral" from "overweight," citing concerns over help wanted advertising.
The warning was the latest in a series of updates from top U.S. newspaper publishers as they ready for a mid-year review presentation to analysts and investors next week. Other publishers have backed quarterly or full-year outlook on hopes business would again start to recover at the pace they enjoyed before the war started in March.
"I have been more surprised that other companies have been managing to scrape through the tough couple of months without an earnings problem," said Edward Atorino, an analyst with Blaylock & Partners L.P.
Earlier this week Knight Ridder Inc., KRI.N the second-largest newspaper company, reaffirmed its second-quarter earnings guidance while Pulitzer Inc., PTZ.N home to the St. Louis Post-Dispatch, stood by its full 2003 earnings outlook.
Los Angeles Times publisher, Tribune Co., TRB.N said on Monday it forecast second-quarter earnings in line with Wall Street's view.
Last week, E.W. Scripps Co. SSP.N said second-quarter earnings would likely hit the higher end of the range of 73 cents to 83 cents per share it had provided in April.
The New York Times said on Wednesday it expects second-quarter earnings per share ranging from 43 cents to 47 cents, short of the 54 cents a share average estimate compiled by Thomson First Call, with a range of 48 cents to 57 cents.
The New York Times said it now expects 2003 earnings per share to increase in the low- to mid-single digit percentages, down from its earlier view of the mid-single to low-double digits.
"I guess with their revenue mix and perhaps a little more cost pressures than other companies, the Times is feeling a little bit more pressure on the bottom line," Atorino said.
Analysts expected full-year 2003 earnings of $2.15 per share from $1.97 in the previous year.
New York Times shares were down $3.40, or 7 percent at $45.14, shortly after midday on the New York Stock Exchange.
MAY ADS STILL UP
The company's May advertising revenue for its newspaper group rose 1.8 percent.
"They see weakness spilling over into May. Again, it isn't totally surprising, only a little worse than it was supposed to be," Atorino.
Including results from the International Herald Tribune, ad revenue for the newspaper group rose 3.7 percent in May. The New York Times, which had owned 50 percent of the paper, won full control in January when it acquired the other 50 percent stake from Washington Post Co. WPO.N
Atorino said he expected a good bounce back for the company in the second half of the year. "2004 should be an even stronger year. They still have a strong franchise long term," he added.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.