By: Seth Sutel, AP Business Writer
(AP) The New York Times Co. reported a 46.2% decline in net fourth-quarter earnings Wednesday as advertising revenues slumped due to the weak economy.
The company, which also publishes The Boston Globe and 16 other newspapers in addition to the Times, reported net income of $74.1 million for the three months ending in December, compared with $137.8 million in the same period a year ago.
Taking out several one-time effects, including severance costs in the most recent quarter and a $46.9 million gain last year from the sale of three regional newspapers, income fell 31.5% to $76.9 million from $112.1 million in the fourth quarter of 2000.
On that basis, earnings per share were 50 cents, in line with the expectations of analysts surveyed by Thomson Financial/First Call. In the same period a year ago the company earned 68 cents per share.
Russell T. Lewis, the company’s chief executive, said in a statement that the earnings decline from a record level a year ago for the fourth quarter as well as the full year reflected a “weakened economy and a poor advertising environment.”
But Lewis also reported that the company’s overall costs fell 5.3% in 2001 as it took several measures to reduce expenses, including staff reductions. He also noted that the company’s online unit, New York Times Digital, became profitable last year.
Results for the fourth quarter continued to reflect the poor advertising climate, which is affecting other major newspaper publishers as well as all media companies that depend on advertising revenues.
Overall reported revenues declined 15.8% to $780.6 million in the fourth quarter versus $927.1 million in the same period a year ago. But excluding the impact of divested properties and an extra week in the company’s fiscal calendar in 2000, revenues fell 11.8%. Advertising revenues, also measured on that basis, fell 17.3% in the quarter.
The company’s costs, also adjusted to exclude the extra week and properties that have been sold, fell 6.7% in the fourth quarter due to lower compensation and promotion costs, as well as declines in both the price and usage of newsprint.
Total newsprint expense fell 16.6% in the quarter compared to a year ago, including a decline of 8.2% in the average cost per ton and an 8.4% decrease in consumption due to lower advertising volume as well as reductions in the width of nine of the company’s newspapers.
The company’s shares fell 44 cents to $41.71 in midday trading on the New York Stock Exchange.
For all of 2001, the company reported net income of $444.7 million or $2.78 per share, versus $397.5 million or $2.32 in 2000. Without the effect of one time-gains and charges, including a gain from the sale of its golf magazine group, per-share earnings were $1.59 versus $2.10 last year.
Full-year revenues declined 10.6% to $3.016 billion from $3.374 billion in 2000.