NY Times Co. 3Q Profit Plunges 39%, Belo Also Down

By: E&P Staff and The Associated Press

The New York Times Co. reported Thursday that its third-quarter 2006 profit from continuing operations plunged 39.2% on costs related to its job cuts and a loss on its sale of its 50% stake in the Discovery Times Channel.

Meanwhile, Belo, publisher of The Dallas Morning News, said net income for the quarter fell to $19.2 million, or 19 cents per share, compared to $22.1 million, or 20 cents per share, during the same period last year.

At the New York Times Co., 3Q operating profit was down 48% from the same period in 2005 to $20.5 million on total revenues that slipped 2.4% to $739.6 million.

Reflecting a continuing tough advertising environment, total ad revenue was off 4.2% to 465,476.

The Times Co. said it earned $14 million, or 10 cents per share, compared with $23.1 milion, or 16 cents per share, in the third quarter of 2005.

Charges related to the staff reduction and the cable TV investment loss each reduced per-share price by 3 cents.

“Our third-quarter results reflect the continued weakness in the print advertising marketplace,” Times Co. President and CEO Janet L. Robinson said in a statement. “We are, however, strongly encouraged by the discipline our teams have shown in holding the line on operating costs, which were virtually flat with the third quarter of last year. The leadership we are showing in transitioning from our print-centric distribution model to become a multi-platform content provider continues to pay dividends through the robust growth in our Internet-related revenues, which contributed more than 8% of the company’s revenues in the quarter and are on track to exceed $250 million by year end.”

Times Co. noted that for this reporting period its broadcast media group are now classified as discontinued operations. In September, the company announced plans to sell the group.

Newsprint expense decreased 2.2% in the third quarter, with 11.1% of the decrease attributable to lower consumption, partially offset by an 8.9% price increase.

News Media Group revenues decreased 3.0% to $721.3 million, the company said.

Advertising revenues decreased 5.1%, due to weakness in print advertising at The New York Times Media Group and the New England Media Group, partially offset by higher online advertising revenues across the News Media Group, the company said.

Circulation revenues were down 1.3%, which the company attributed mainly to weakness at the New England Media Group.

Operating profit for the online business increased to $6.4 million from $3.8 million. All told, Internet-related businesses generated $62.8 million in revenue, up from $50.5 million in the year-ago period.

The Times said its previously announced plans to consolidate New York area printing at its College Point, N.Y., plan and to sublease its Edison, N.J. plan, is expected to be completed in the second quarter of 2008.

The Times said it expects a return of “at least 15%” on its $135 million investment in the consolidation, with a payback period of five and a half years. It said it currently estimates it will record total costs to close the Edison plan to be in the range of $104 to $128 million.

TimesSelect, the fee-based product on NYTimes.com, currently has 551,000 subscribers, the Times Co. said, with about 65% receiving TimesSelect as part their home-delivery subscriptions, and 35% receiving it from online-only subscriptions. Since its launch in September 2005, TimesSelect has generated more than $8.5 million in revenues, the company said.

Meanwhile, newspaper and television station owner Belo Corp. said Thursday third-quarter profit dropped 13% weighed down by charges, as revenue edged up slightly amid weak results from the company’s newspaper group.

Belo, publisher of The Dallas Morning News, said net income for the quarter fell to $19.2 million, or 19 cents per share, compared to $22.1 million, or 20 cents per share, during the same period last year.

Results for the latest quarter were hurt by $5.4 million, or 3 cents per share, in severance charges for a voluntary severance program at the Dallas Morning News. They were also impacted by $10 million, or 6 cents per share, in transition costs associated with its technology initiatives and $2.9 million, or 2 cents per share, in stock-based compensation costs.

Last year’s results included a $3.5 million, or 2 cents per share, credit to network compensation and an impact of 4 cents per share from lost revenues and incremental expenses associated with Hurricanes Katrina and Rita.

Analysts polled by Thomson Financial were looking for third-quarter earnings of 18 cents per share.

Revenue gained 0.8 percent to $376.4 million from $373.4 million, missing analysts’ estimates of $386.3 million. Television group revenue rose 6.9 percent, while newspaper group revenue fell 4.2 percent

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