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New York Times earnings drop on higher costs (DINOSAUR MEDIA EXTINCTION ALERT!)
Reuters ^ | April 13, 2006 | Staff

Posted on 04/13/2006 5:51:45 AM PDT by abb

NEW YORK, April 13 (Reuters) - New York Times Co. (NYT.N: Quote, Profile, Research) on Thursday posted lower first quarter earnings, hurt by higher newsprint costs.

The publisher of The New York Times, Boston Globe and International Herald Tribune said net earnings fell to $35 million, or 24 cents a share, from $111 million, or 76 cents a share, a year earlier. The year ago quarter included a gain of 46 cents a share from the sale of its current headquarters.

The New York Times warned investors last month that first quarter earnings would be below analysts' average estimates at the time of 25 cents a share

TOPICS: News/Current Events
KEYWORDS: liberalmedia; msm; msmwoes; newspapers; nyt
OOOOF!! $.24/share vs $.76
1 posted on 04/13/2006 5:51:48 AM PDT by abb
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To: abb

From Business Wire

The New York Times Company Reports 2006 First-Quarter Results
Thursday April 13, 8:40 am ET

NEW YORK--(BUSINESS WIRE)--April 13, 2006--The New York Times Company announced today that 2006 first-quarter diluted earnings per share (EPS) were $.24, compared with $.76 in the first quarter of the prior year. First-quarter net income was $35.0 million compared with $111.0 million in the same period of 2005.

The 2006 first-quarter results include a pre-tax charge of $9.4 million ($5.2 million after tax or $.04 per share) for costs associated with a staff reduction program announced in September 2005.

The 2005 first-quarter results included a gain of $67.8 million after tax or $.46 per share from the sale of the Company's current headquarters ($62.8 million after tax or $.43 per share) as well as property in Florida ($5.0 million after tax or $.03 per share).

The Company only presents EPS on a generally accepted accounting principles (GAAP) basis. This differs from the pro forma EPS provided by databases such as First Call and Reuters.

"Our results in the first quarter reflect higher advertising and circulation revenues at The New York Times Media Group and the Regional Media Group, in part due to the introduction of innovative new products," said Janet L. Robinson, president and chief executive officer. "Performance at the New England Media Group was adversely affected by consolidation among important advertisers and by a continued challenging environment.

"The Web sites in our News Media Group posted solid gains in advertising revenues - up 23 percent in the quarter, which is a particularly strong showing given the large revenue base for this increase.

"We continue to be very pleased with the performance of, which we acquired a year ago in March. Its revenues climbed an estimated 98 percent in the quarter. All three of its revenue streams - display advertising, cost-per-click advertising and e-commerce - achieved strong growth, driven by higher rates and increased spending from blue-chip advertisers.

"In total, our Internet businesses now account for 7.5 percent of our overall revenues, up from 4.5 percent in the first quarter of last year. This stems from both strong organic growth as well as the acquisition of

"Looking ahead, we are focused on improving the margins of our businesses by continuing to enhance existing products and introduce new ones that serve our audiences and advertisers in print, online and through broadcast media. On the cost side, we are benefiting from the changes we made to our expense structure in 2005 and remain very disciplined on managing our costs. Total costs, excluding those related to staff reductions and, grew 3.2 percent in the first 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. We remain committed to improving our margins by achieving higher revenue growth than growth for these costs for the full year."

First-Quarter Financial Results

All comparisons are for the first quarter of 2006 to the first quarter of 2005, unless otherwise noted.


Total revenues rose 3.3 percent to $831.8 million compared with $805.6 million. On March 18, 2005, the Company acquired, a leading online provider of consumer information. Excluding, total revenues increased 1.1 percent.

Advertising revenues grew 3.9 percent and, excluding, increased 0.7 percent. Circulation revenues, which were not affected by the acquisition, were up 0.3 percent compared with last year.

In the first quarter the Company benefited from the timing of Easter, which will be in April this year but was in March in 2005. Traditionally Easter is a time of reduced overall advertising since classified advertising typically declines on the holiday. Retail advertising normally increases in the days leading up to Easter.

Costs and Expenses

Total costs and expenses increased 6.0 percent to $763.5 million from $720.5 million. Excluding those related to staff reductions and, total costs and expenses rose 3.2 percent. The increase includes:

* 1.3 percent attributable to higher distribution and outside printing expense,
* 1.0 percent attributable to increased raw materials expense and
* 0.8 percent attributable to higher promotion expense.

Newsprint expense rose 5.9 percent in the first quarter, with 8.2 percent of the increase resulting from higher prices partially offset by a 2.3 percent decrease from lower consumption.

Stock-based compensation expense decreased to $3.7 million ($2.2 million after tax or $.01 per share) from $6.6 million ($4.8 million after tax or $.03 per share) in the first quarter of last year, partially offsetting the increase in expenses discussed above. In 2006, no compensation expense is being recorded for the Company's employee stock purchase plan because, as a result of changes implemented in 2006, it is no longer considered a compensatory plan.

Total costs and expenses excluding staff reductions,, raw materials and depreciation and amortization increased 2.4 percent. Reconciliations to total costs and expenses excluding these items (non-GAAP financial measures) are included in the exhibits to this release.

Operating Profit

Operating profit decreased to $68.3 million from $208.1 million. The 2005 first quarter included a pre-tax gain of $122.9 million related to the sale of assets. Excluding the gain on the sale of assets in 2005, operating profit decreased due to higher expenses, as discussed above, partially offset by growth in revenues and the inclusion of

Business Segment Results

News Media Group

Total News Media Group revenues increased 1.0 percent to $781.0 million from $773.2 million. Advertising revenues rose 0.7 percent, mainly due to growth in online revenues. Higher print advertising rates were more than offset by lower print volume. Circulation revenues were up 0.3 percent compared with last year due to growth at The New York Times Media Group and the Regional Media Group partially offset by declines at the New England Media Group.

Operating profit for the News Media Group decreased to $68.3 million from $91.3 million, reflecting higher expenses, as discussed above, partially offset by growth in revenues.

Broadcast Media Group

Broadcast Media Group revenues increased 2.0 percent to $32.0 million from $31.3 million, due to revenues resulting from the acquisition of KAUT-TV in November 2005. Excluding KAUT-TV, Broadcast Media Group revenues decreased 1.9 percent, as declines in automotive advertising and network compensation were only partially offset by higher Olympic advertising.

Operating profit decreased to $3.2 million from $4.1 million. Excluding KAUT-TV, operating profit decreased mainly because of lower revenues.'s first-quarter revenues totaled $18.8 million and its operating profit was $7.6 million. The Company estimates that's total revenues increased approximately 98 percent in the first quarter compared with the first quarter of 2005, based on the Company's records and the records of the prior owner. In 2006 the Company expects no dilution from, and in 2007 expects that it will add to earnings.

Other Financial Data

Internet Revenues

In the first quarter, the Company's Internet-related businesses generated $62.2 million in revenue, up 72.3 percent from $36.1 million in the 2005 first quarter. Our Internet-related businesses include our digital archives, the Web sites of our newspapers and broadcast properties and, which we acquired last March. Excluding, Internet revenues increased 23.9 percent. In total, Internet businesses accounted for about 7.5 percent of the Company's revenues in the first quarter versus 4.5 percent in the same quarter a year ago.

Joint Ventures

Net income from joint ventures totaled $2.0 million in the first quarter compared with a net loss of $0.2 million in the first quarter of 2005, mainly because of stronger performance at the Discovery Times Channel.

As part of its ongoing efforts to examine the value of its assets and their continuing fit with the Company's strategy, on April 8 the Company exercised its right to require Discovery Communications, Inc. to purchase the Company's 50 percent investment in the Discovery Times Channel, a digital cable channel. As part of the initial investment in the channel, this right was exercisable following the fourth anniversary of the investment. By contract, the sale price is determined by a formula, with a floor of $80 million and a ceiling of $135 million, as calculated by an independent appraiser. The independent appraiser has not yet been selected. The Company's investment balance in the channel was approximately $104 million at the end of the quarter. Based on the sale price, which results from the independent appraisal, the Company will record a gain or loss, depending on whether the price is higher or lower than its investment balance.

Income Taxes

The Company's effective income tax rate was 39.6 percent in the first quarter compared with 42.9 percent in the first quarter of 2005. The tax rate for the 2005 first quarter includes the tax effect related to the gain from the sale of the Company's current headquarters last year.

Interest Expense-net

Interest expense-net decreased to $12.5 million from $14.2 million. The first quarter of 2005 includes $4.8 million related to the redemption of the Company's $71.9 million debentures. Interest expense-net in the first quarter of 2006 includes the impact of higher short-term interest rates.


In the first quarter, the Company repurchased 0.3 million Class A shares at a cost of $7.8 million. Approximately $136.9 million remained at the end of the first quarter from the Company's current share repurchase authorization. Class A and Class B common shares outstanding at the end of the quarter totaled 145.0 million shares.

Cash and Total Debt

At the end of the first quarter, the Company's cash and cash equivalents were approximately $40 million and total debt was approximately $1.4 billion.

Capital Expenditures

In the first quarter, the Company's capital expenditures totaled approximately $70 million. This amount includes both the Company's and its development partner's expenditures for its new headquarters building. The Company's capital expenditures, excluding its development partner's expenditures, were approximately $50 million, which included approximately $28 million for its new headquarters.

2006 Expectations

Below are the Company's expectations for 2006. With the exception of the first item, they have not changed since they were updated in January.

* Earlier this month, The New York Times decreased the number of pages devoted to stock tables from six to two Tuesday through Saturday and introduced new tools on to help users better manage their portfolios. As a result, the Company expects to save $3 million in newsprint in 2006 and $4 million on an annualized basis.
* The New York Times newspaper raised home-delivery rates in New York and across the country about 4 percent effective February 6. This is expected to result in additional circulation revenues of approximately $7 to $8 million in 2006. Since the Company last raised home-delivery rates in early 2002, it has significantly enhanced its coverage of the arts, travel, business and real estate and introduced new sections such as Thursday Styles, Friday Escapes and T: Style magazines.
* Because the Company has a fiscal year that equalizes the number of Sundays, 2006 has an extra week. In the fourth quarter of 2006, there will be 14 weeks rather than 13.
* Across all of the newspaper properties the Company expects that revenues will benefit from higher advertising rates in 2006. At The Times, rates increased about 5 percent, and at the Globe and our Regional Media Group, rates increased about 3 percent.
* The Broadcast Media Group results will include a full year of revenues for KAUT-TV, which was acquired in November 2005. For the full year 2005, KAUT-TV had revenues of approximately $6 million based on the Company's records and the records of the prior owner. In 2006, the Group's stations are expected to benefit from mid-term elections, and, in the first quarter, benefited from the Olympics.
* The Company expects that all of its digital properties will continue to experience very strong revenue growth.
* The Company's revenues will include a full year of revenue from, which is expected to have double-digit revenue and operating profit growth.
* Newsprint cost per ton - Growth rate expected to be 11 to 13 percent.
* Depreciation and amortization - $154 to $158 million.
* Income from joint ventures - $18 to $22 million.
* Interest expense - $58 to $62 million.
* Tax rate - 39.6 percent.
* Capital expenditures - Under GAAP, total capital expenditures for both the Company and its development partner in its new headquarters building appear on the Company's financial statements.

Company* $355 to $385 million
Development partner $130 to $150 "

Total $485 to $535 million

*Includes $240 to $270 million for new headquarters

Conference Call Information

The Company's first-quarter earnings conference call will be held on Thursday, April 13, at 11 a.m. E.T. The live webcast will be accessible through the Investors section of the Company's Web site,, and other Web services, including CCBN's Individual Investor Center and CCBN's StreetEvents for institutional investors.

To access the conference call, dial 800-819-9193 (in the U.S.) and 913-981-4911 (international callers) at least 10 minutes prior to the scheduled start of the call.

A replay of the webcast will be available online at beginning about two hours after the call. The archive of the webcast will be available for 30 days. A digital replay of the call will also be available at 888-203-1112 (in the U.S.) and 719-457-0820 (international callers) beginning approximately two hours after the call until 5 p.m. E.T. on Monday, April 17. The access code is 2599743.

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These risks and uncertainties include national and local conditions, as well as competition, that could influence the levels (rate and volume) of retail, national and classified advertising and circulation generated by our various markets and material increases in newsprint prices. They also include other risks detailed from time to time in the Company's publicly filed documents, including the Company's Annual Report on Form 10-K for the year ended December 25, 2005. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

The New York Times Company (NYSE: NYT - News), a leading media company with 2005 revenues of $3.4 billion, includes The New York Times, the International Herald Tribune, The Boston Globe, 15 other daily newspapers, nine network-affiliated television stations, two New York City radio stations and 35 Web sites, including, and The Company's core purpose is to enhance society by creating, collecting and distributing high-quality news, information and entertainment.

This press release can be downloaded from

2 posted on 04/13/2006 5:53:22 AM PDT by abb (Because News Reporting is too important to be left to the Journalists.)
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To: abb

And best of all, the NYT continues to wish the very worst for their employee's families and the entire USA!!!

3 posted on 04/13/2006 6:23:30 AM PDT by Waco
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To: abb traded at pennies, and nearly went out of business. If only the NYT would do the same... But they won't, of course. Even Salon didn't fold. Instead they put everything behind a firewall and made their most dedicated customers pay.

The NYT has already gone down this road -- and that slope is a slippery one. Best yet, the more they lock away their content, the less and less relevant they are. Did you know they have blogs at the Times? But behind their pay wall. Ridiculous. May the madness continue.

4 posted on 04/13/2006 6:46:58 AM PDT by NoStaplesPlease
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To: Grampa Dave

Some good news to go with your coffee this morning....

5 posted on 04/13/2006 7:05:59 AM PDT by abb (Because News Reporting is too important to be left to the Journalists.)
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New York Times earnings drop on higher costs - 04/13/2006
Tribune 1Q Profit Slides - 04/13/2006
Gannett quarterly earnings drop; newspapers struggle - 04/12/2006
Media General Q1 Earnings Fall - 04/12/2006
TIME INC. LAYS OFF 250 - 04/07/2006
BOSTON AD SKID CHILLS TIMES (12% revenue decline the worst of major newspaper groups) - 03/23/2006
'Washington Post' To Cut 80 Newsroom Jobs, Sources Say - 03/10/2006
Gannett January ad revenue slips - 02/15/2006
E.W. Scripps Reports 4Q Loss of $603,000 - 02/02/2006
Knight Ridder profit declines 22% - 01/31/2006
TIMES BOMBS ("paper of record" 2001-04 daily circulation off 19%) - 01/11/2006
TIMES' 4Q PROFIT OFF (attributes costs of 500 job cuts) - 12/22/2005
Gannett Nov. Revenue Drops 2.1% (Other MSM sinking, too) - 12/08/2005
L.A. Times Drags on Tribune Revenue (200 *more* layoffs expected) - 12/02/2005
Newspaper circulation down. Sanfrancisco Chronicle down 17% - 11/08/2005
Newspaper Circulation Continues to Decline (NY Daily News DOWN 1.5% - May 2005) - 10/24/2005
Bored readers cutting off Globe’s circulation - 10/20/2005
Time Inc. Gets A U.S. Subpoena About Circulation - 09/24/2005
Denver papers use liberal rules to boost circulation - 08/08/2005
Advertisers Sue 'Minneapolis Star Tribune' Over Circulation Inflation - 06/29/2005
Arrests made in Newsday circulation scandal - 06/16/2005
Los Angeles Times Reports March Circulation (Down, down, down) - 05/02/2005
Belo Begins Refunding Advertisers Over Inflated Circulation Figures (Texas) - 05/02/2005
Why Can’t the Washington Post Keep Circulation Up? - 07/23/2004
Newsday, Hoy publishers retire amid circulation scandal - 07/19/04
Publishers Seek Scapegoats for Circulation Woes - 07/05/2004
Tribune Company (LA Times parent) Admits Inflated Circulation Numbers At Two Papers - 06/23/2004
6 posted on 04/13/2006 11:59:19 AM PDT by Milhous (Sarcasm - the last refuge of an empty mind.)
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