By: E&P Staff
The New York Times Co. reported first-quarter diluted earnings per share (EPS) from continuing operations of 14 cents Thursday, compared with 21 cents in the first quarter of 2006.
Excluding special items — including accelerated depreciation expense amounting to 5 cents a share, and staff reduction costs of 3 cents a share — EPS was 25 cents from continuing operations compared with 25 cents in the year-ago period.
Operating profit decreased to $54.5 million from $60.5 million in the quarter, Times Co. said, while operating profit before depreciation and amortization increased to $98.9 million from $95.9 million in the first quarter of 2006.
Total revenues decreased 1.6% to $786.0 million from $799.2 million.
Advertising revenues overall decreased 3.4%, while circulation revenues were up 1%, and “other” revenues rose 4.3%.
Times President and CEO Janet L. Robinson said despite a difficult print environment, the company had made progress in the quarter.
“Operating profit before depreciation and amortization grew 3%,” she said. “Contrary to trends across the industry, circulation revenues increased. Our Internet-related revenues rose 22%, in part due to new products, and now account for 10% of the company’s revenues.”
Robinson noted that the company had increased its dividend 31%, giving a yield of nearly 4%, “significantly above our peers and the S&P 500.”
Results from the Broadcast Media Group, which Times Co. agreed to sell for $575 during the quarter, are not included in quarter-to-quarter comparisons.
Overall operating costs decreased 1% to $731.5 million from $738.7 million, mostly as the result of lower newsprint cost — which fell 9.9% in the quarter — as well as decreased compensation and promotion costs that were partially offset by the accelerated depreciation of its Edison, N.J. printing plant.
Times Co. said it expects to recognize a pre-tax loss of $65 million to $72 million on the real estate transactions related to closing the Edison plan and consolidating printing at its College Point plant in Queens. The company had originally planned to sublease the Edison plant through the end of its lease term in 2018.
“After evaluating the options with respect to the lease, the company decided it was financially prudent to purchase the Edison facility and sell it, with two adjacent properties it already owned, to a third party,” Times Co. reported. That purchase and sale, expected to close in the second quarter of this year, will result in the pre-tax loss, the company said.
First-quarter revenues from Internet operations jumped 21.6% to $74.3 million from $61.1 million in the first quarter a year ago. In total, the company said, Internet businesses accounted for 9.5% of total revenues in the first quarter compared with 7.6% in the 2006 first quarter.
Reporting its expectations for the rest of 2007, however, Times Co. warned that it no longer expected its Internet businesses such as About.com to grow at 30% as it originally forecast. “With Internet advertising growing more slowly across the industry, the company expects that revenues from its Internet-related businesses will be less than originally forecast for 2007,” it said.
Newsprint costs per ton will continue to decline at an expected 7%, more than it originally estimated.