New York Times Q3 Loss Narrows; Shares Climb

(RTTNews) - Thursday, media giant New York Times Co. (NYT | Quote | Chart | News | PowerRating) reported a narrower loss in its third quarter, helped by cost reductions, while quarterly revenues declined 16.9% as advertising revenues dropped 26.9%. Net income, excluding items, came in above Street view. In the morning hours of trading, shares climbed more than 20% on the New York Stock Exchange.

For the third quarter, the New York-based news provider reported a net loss attributable to the common shareholders of $35.62 million or $0.25 per share, compared to a loss of $106.29 million or $0.74 per share in the year-ago quarter.

The third quarter results included a $76.1 million pretax charge for estimated pension withdrawal obligations, a tax expense of $11.7 million or $0.08 per share from the reduction of the company's deferred tax and a $5.2 million pretax gain on the sale of surplus real estate assets at the Regional Media Group.

In addition to these special items, the company had severance costs of $3.8 million in the third quarter of 2009 compared to $18.1 million in the third quarter of 2008. On an adjusted basis, net income increased to $0.16 per share from $0.05 per share in the same quarter last year.

On average, three analysts polled by Thomson Reuters expected the company to report a loss of $0.01 per share for the quarter. Analysts estimates typically exclude special items.

Total revenues for the quarter decreased 16.9% to $570.62 million from $687.04 million in the prior-year quarter, primarily due to a decline in print advertising. Three Analysts were looking for revenue of $561.60 million.

Among others in the industry, Gannett Co., Inc. (GCI | Quote | Chart | News | PowerRating) reported that its third quarter profit declined 53% to $$73.75 million, or $0.31 per share over last year, hurt by higher one-time charges and an 18% decline in revenues that totaled $1.34 billion. Excluding items, adjusted earnings per share for the quarter declined 42%, as cost cuts and lower newsprint expenses helped offset weak advertising sales.

Segment wise, New York Times' News Media Group revenues decreased 18% mainly due to lower print advertising and the closure of C & S. Excluding C & S, total revenues decreased 15.3%. Total About Group revenues increased 7.2% due to higher cost-per-click advertising. Total Internet revenues decreased 7.2%, and Internet advertising revenues declined 8.2%.

Advertising revenues dropped 26.9%, while circulation revenues rose 6.7%. Other revenues declined 38.5% due to the closure of C & S. Excluding the operations of C & S, total revenues fell 14.3%, circulation revenues increased 7.5% and other revenues decreased 10.9%.

Operating costs for the quarter decreased 22.4% to $525.1 million from $677.1 million a year ago. Depreciation and amortization decreased to $31.3 million, compared to $33.9 million in the third quarter last year.

Excluding depreciation, amortization, severance, operating profit was $490 million in the third quarter of 2009, down 21.6% from $625.1 million in the third quarter last year, as reductions occurred in nearly all major expense categories as a result of cost-saving initiatives, including the closure of C & S.

Newsprint expense declined 45.1% with 27.9% from lower pricing and 17.2% from lower consumption.

Commenting on the results, the company's president and CEO Janet Robinson said ,"Strong cost control remained a leading contributor to improved operating performance in the quarter. We continued to aggressively reduce our expenses, and the actions we have taken over the past quarters are evidenced in an approximately 22% decline in operating costs."

The company said that with its many initiatives to operate more efficiently and effectively across the company, it expect its cost performance to remain strong and it is on course to achieve about $475 million in savings this year.

Earlier this month, the company closed the sale of WQXR-FM, its New York City classical radio station, for gross proceeds of $45 million. The proceeds from the transaction were used to further reduce its outstanding debt balance.

On October 19, New York Times said it would trim about 100 newsroom jobs by the end of the year, as it struggles to cope with the falling global newspaper advertising revenue. The company, which is cutting about 8% of the 1,250 workers, intends to offer buyouts, while also resorting to layoffs if enough people do not leave voluntarily. Earlier, the company had cut about 100 newspaper jobs in February 2008.

Further, during the quarter the company terminated the process to explore the sale of its Boston Globe, Boston.com and related businesses following careful consideration and analysis. In August, Times Co. had hired Goldman Sachs & Co. to explore the sale of the New England Media Group, which principally includes Globe, Boston.com, Worcester Telegram & Gazette, Telegram.com and related businesses.

Earlier this year, the company had threatened to close Boston Globe if it didn't get concessions on employee wage and benefit cuts. In July, Boston Globe's largest union, Boston Newspaper Guild, approved a new contract that includes pay cuts and benefits that would lead to $10 million in savings.

Harbinger Capital disclosed in a filing with the U.S. Securities and Exchange Commission that it has reduced its stake in New York Times Co. (NYT | Quote | Chart | News | PowerRating) to 16.38%.

On September 17, financial service provider Harbinger Capital has sold 5 million shares of New York Times at $8.25 a piece. Following this sale, Harbinger Capital owns nearly 23.54 million shares of the New York-based company.

For the nine-month period, the company's net loss narrowed to $71.03 million or $0.49 per share from $85.49 million or $0.59 per share in the similar period of last year. Total revenues for the period declined 19% to $1.76 billion from $2.18 billion in the prior-year period.

NYT is currently trading at $10.29, up $1.54 or 17.60% a volume of 3.80 million shares on the NYSE.

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