New York Times Company Posts a 2nd-Quarter Profit
The New York Times Company swung to a profit in the second quarter on stronger circulation revenue and lower operating costs, but continued weakness in advertising weighed on results.
The company reported on Thursday that net income rose to $20.1 million, or 13 cents a share, from a loss of $87.6 million, or 58 cents a share, in the period a year earlier.
Last year’s second-quarter results were hurt by write-downs related to the sales of About.com and the company’s regional newspaper group. Excluding those items, income from continuing operations was $20.1 million, compared with $38.1 million in the period a year earlier.
Total revenue for the quarter declined less than 1 percent, to $485.4 million, from $489.8 million in the second quarter of 2012. Circulation revenue rose 5.1 percent, to $245.1 million, from $233.3 million. But that gain was largely offset by a 5.8 percent decline in advertising revenue, to $207.5 million.
Print advertising at the company’s newspapers, which include The New York Times, The Boston Globe and The International Herald Tribune, declined 6.8 percent, and digital advertising fell 2.7 percent. Digital advertising now accounts for 24.7 percent of the company’s total advertising revenue.
Operating costs declined 3.1 percent, to $431.9 million, from $445.7 million, mainly because of lower compensation and benefits costs, according to the company.
“Our improved results in the second quarter were an organizationwide effort — with contributions from more favorable revenue trends and strong cost performance,” Mark Thompson, the company’s president and chief executive, said in a statement.
The number of paid subscribers to the Web site, e-reader and other digital editions of The Times and The International Herald Tribune grew to 699,000, a jump of more than 35 percent from the period a year earlier. Digital subscriptions to The Boston Globe and BostonGlobe.com rose to 39,000, an increase of nearly 70 percent from 23,000 a year earlier.
Alexia S. Quadrani, an analyst at JPMorgan Chase, said that while she was pleased with the results, she was also aware of the challenges newspapers were facing.
“As nice it is to see slightly better-than-expected numbers, the fact that we are many years into these declines and they still persist just shows you the secular challenges this industry is facing,” said Ms. Quadrani. “The New York Times has a successful digital platform to help offset some of the ongoing newspaper advertising weakness. It’s still a headwind you’re going to try to offset every day.”
Since Mr. Thompson joined The Times in November, he has focused on rebranding The Times as a global operation. In February, the company announced it would sell the New England Media Group, which includes The Boston Globe, Boston.com, The Worcester Telegram & Gazette and Globe Direct, a direct-mail marketing company. Bids for the properties were due in July but a sale has not been announced.
The Times also announced in February that it would rename The International Herald Tribune, its 125-year-old newspaper based in Paris, The International New York Times. It also will unveil a new Web site for international audiences in the coming months.
The company has also continued to increase its plans to charge readers for content. In June, the company started to charge nonsubscribers who want to read more than three articles a day on The New York Times apps for mobile devices.
“We are making good progress and are on track with our strategic growth initiatives,” Mr. Thompson said. “In particular, we are well under way in the ramp-up for the fall rebrand of The International Herald Tribune as The International New York Times and with the development work related to our new paid products.”