This summary is based on the second quarter fiscal 2007 earnings call conducted by The New York Times Company (NYT: chart) on July 25, 2007.
President, Chief Executive Officer, Director: Janet Robinson
Chief Financial Officer, Senior Vice President: Jim Follo
Senior Vice President, Digital Operations: Martin Nisenholtz
President, General Manager, New York Times: Scott Heekin-Canedy
Investor Relations: Catherine Mathis
Key Investors Issues
- The GAAP EPS from continuing operations were 15 cents versus 37 cents in prior year.
- Quarterly revenue dropped 3.7% over the previous year to $788.9 million.
- Operating costs fell 3.9% due to lower newsprint, staff reduction and other costs.
Second Quarter Fiscal 2007 Financial Highlights
The company reported earnings per share from continuing operations on a GAAP basis of 15 cents compared with 37 cents in the same period a year ago.
The firm had three special items in the quarter. They were a 29 cents loss on the sale of New Jersey printing facility; a 15 cents gain on the sale of a radio station and 5 cents of accelerated depreciation expense. In total, these special items reduced earnings by 19 cents per share.
Excluding the special items, the firm earned 34 cents per share from continuing operations compared with 37 cents in the second quarter last year. In addition, the company recorded a pretax gain of $191.2 million, $94.3 million after tax or 66 cents per share from the sale of its broadcast media group. These amounts are reflected in discontinued operations.
The print advertising environment remained very challenging.
Ad revenues at the
news media group decreased 7% with almost 40% of the decline coming from real estate advertising.
At the
Times media group, ad revenues decreased 5% in the quarter. Print categories that performed well included financial services which saw increases from credit card, insurance, and mutual fund advertisers; cosmetics, driven by very successful issues of T Beauty and T Living; and package goods which benefited from new business from food and consumer product companies.
Print categories where the firm saw significant declines were residential real estate, which decreased because of weakness in the local and national housing markets; telecommunications which was down as wireless carriers reduced spending; and automotive, down mainly due to less advertising from domestic automakers.
The
New England media group continues to grapple with a soft advertising climate. Second quarter advertising revenues decreased 8%. The firm has nearly cycled the difficult comparisons with Filene’s. In early September, the opening of a new mall in Natick will include Nordstrom''s and Neiman Marcus. These openings are expected to benefit the Globe as are easier comparisons in the second half of the year.
Ad revenues in the national category at the New England media group improved slightly in the second quarter. Strong categories were pharmaceutical and packaged goods, media, and telecommunications. Overall classified advertising in New England was soft in all three major areas: real estate, help wanted and automotive. As in other U.S. cities, real estate advertising declined in Boston due to the soft housing market.
New products also benefited the Globe in the second quarter. Both Design New England and Fashion Boston added to revenues and additional issues of each are scheduled for the second half of 2007. Later this year, Boston plans to launch a third publication targeting the affluent active lifestyle segment of the New England market.
At the
Regional media group, second quarter advertising revenues decreased 12% mainly due to lower levels of classified advertising. Recruitment, real estate and automotive advertising were down significantly. Much of this was related to the downturn in the Florida and California housing markets, which has affected not only real estate but recruitment and retail advertising as well. In the second quarter of last year, real estate advertising rose 46% at the company’s Florida properties and this past quarter it fell 18%.
