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April 19, 2007
New York Times Company earnings down again
Thomas Lifson
The string of bad business news for the New York Times Company and its shareholders grows longer and longer with each passing quarter. First quarter earnings were down a whopping 26%, propelled by trouble in the advertising print market, write-offs for the closing of the company's Edison, NJ printing plant, and slowing growth in the internet business, intended to replace print media as the driver of company growth. The write-offs on the printing plant will continue for some time.
All comparisons with last year exclude the business results of the company's television station group, which was sold last year. The starkest comparison, to my mind, comes with this data:
Income from continuing operations dropped to $20.1 million, or 14 cents per share, from $30.5 million, or 21 cents per share, in the previous year.
It doesn't take much projecting forward a comparable rate of decline to see real trouble ahead in just a few years.
The company has attempted to recover from the decline in print by investing heavily in the internet. But according to Business Week, expectations are being lowered.
Internet revenue climbed 21.6 percent to $74.3 million, making up 9.5 percent of the company's revenue during the quarter. In the year-ago quarter, Internet revenue was $61.1 million, representing 7.6 percent of revenue. [....]
New York Times anticipates 2007 revenue from its Internet-related businesses, including About.com, NYTimes.com, Boston.com, iht.com and the sites associated with its regional newspapers, to increase less than its prior forecast of 30 percent due to a slowdown in Internet advertising growth.
"As Internet is supposed to be the savior of print, the online slowdown is worrisome," analyst Paul Ginocchio of Deutsche Bank wrote in a client note.
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