New York Times Co. 2Q Profits Up Slightly On 1.6% Revenue Gain

By: E&P Staff

The New York Times Company said Tuesday that its second-quarter 2006 net income increased to $61.3 million compared to $60.8 million in the same period of 2005. Second-quarter earnings per share (EPS) were 4.2%, unchanged from the year-ago period.

The Times Co., which on Tuesday also announced it planned to reduce its production workforce by 250 as part of shift in printing, noted that the 2006 second-quarter results include a pre-tax charge of $9.1 million for costs associated with the staff reduction program announced in September 2005. The 2005 second-quarter results included a pre-tax charge of $10.0 million for the costs of similar reduction in force announced last May.

Total revenues rose 1.6% to $858.7 million compared with $845.1 million a year ago.

Advertising revenues increased 1.0%, and circulation revenues were up 0.6%. “Other” revenues jumped 12.6%.

Total costs and expenses increased 2.9% to $759.7 million from $738.5 million a year-ago. Excluding costs and expenses related to staff reductions, the Times Co. said, total costs and expenses rose 3.0%, with 0.8% attributable to increased raw materials expense. Newsprint expense increased 7.4% from a year ago, with higher prices partially offset by lower consumption, the company said.

The higher expenses, partially offset by revenue growth, took a toll on operating profit, which decreased to $99.1 million from $106.5 million in second-quarter 2005.

Total News Media Group revenues increased 0.5% to $800.2 million from $795.9 million, the company said.

Advertising revenues for the group decreased 0.7%, which the company said was mainly due to weakness in print advertising at the New England Media Group partially offset by higher online revenues across the News Media Group.

Circulation revenues were up 0.6%, which the company attributed to growth at The New York Times Media Group and the Regional Media Group, partially offset by declines at the New England Media Group.

“Other” revenues increased 12.3% largely because of the introduction of TimesSelect and higher commercial printing revenues, the company said.

“Our second-quarter results reflect higher advertising, circulation and other revenues at The New York Times Media Group and the Regional Media Group, partly because of the introduction of innovative new products,” Times President and CEO Janet L. Robinson said in a statement. “Performance at the New England Media Group was adversely affected by consolidation among important advertisers and by a continued challenging economic environment.”

Robinson said Times Web sites posted a 25% ad revenue gain in the quarter. Internet business now accounts for 7.7% of overall revenue, up from 5.8% in second-quarter 2005.

“On the cost side, we are benefiting from the changes we made to our expense structure in 2005,” she said. “Total costs grew 2.9 percent in the second quarter. We expect the rate of growth for costs — excluding those for staff reductions and the extra week in our fiscal calendar — to be lower for the balance of the year.”

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