This summary is based on the third quarter earnings call conducted by The New York Times Co. (NYT) on October 23, 2008.
Management:
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President, Chief Executive Officer, Director: Janet L. Robinson
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Senior Vice President and Chief Financial Officer: James M. Follo
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President and General Manager of The New York Times: Scott Heekin-Canedy
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Senior Vice President - Digital Operations: Martin A. Nisenholtz
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Senior Vice President, Corporate Communications: Catherine J. Mathis
Key Investors Issues
- Net profit was $6.53 million or 5 cents a share, down 51.4% from $13.4 million or 9 cents a share in 2007.
- Total revenues for the company declined 8.9% to $687 million from $754.4 million in 2007.
Year To Date Highlights:
- Revenues dropped 7% to $2.3 billion
- Net income was $27 million or 19 cents a share, down 82%.
Third Quarter Highlights
The firm reported a profit of $6.53 million or 5 cents a share, down 51.4% from $13.4 million or 9 cents a share in the prior year due to the continuing softness of business conditions driven by the secular forces affecting the newspaper industry.
- Total revenues for the company declined 8.9% to $687 million from $754.4 million in 2007 with ad revenues down 14.4%, circulation revenues up 1% and other revenues down 4.2%.
- Ad revenues at the News Media Group decreased 15.9% with national advertising down 11.4%, retail down 11% and classified down 29.3% with half of the decline in ad revenues at the News Media Group attributable to classified.
- At the Times Media Group ad revenues decreased 13.7% in the quarter.
National print categories that performed well included financial services where mutual funds, banks and insurance companies ran ads reassuring their customers amidst the crisis in the financial markets.
- Healthcare benefited from increased advertising from pharmaceutical companies and hospitals; and corporate advertising which saw significant gains from energy-related companies.
- In total luxury advertising which made up about 13% of the Times Media Group advertising revenues increased in the low single digits in part due to the performance of key branded Sunday supplemental magazine.
- The national print categories with the largest decline were entertainment where the films released this quarter did not match the strong performance of those in the very strong third quarter of last year.
- Hotels weakened as two advertisers did not repeat major campaigns this year; and technology as advertisers held back budgets in a time of economic uncertainty and the migration of technology advertising from print to online continued.
Classified advertising decreased in all three major categories, recruitment, real estate and automotive.
- Retail advertising revenues were down due to decreased advertising from department stores, direct response and mass market stores.
- At the New England Media Group advertising revenues declined 19.4% and national ad revenues decreased with the largest declines in travel, entertainment and national automotive categories.
- Retail advertising revenues declined due to weakness in department store, home improvement and home furnishing advertising.
- Live entertainment and telecommunications advertising increased and overall, classified advertising at the New England Media Group was soft in all three major areas recruitment, real estate and automotive.
At the Regional Media Group advertising revenues decreased 19.2% and about 2/3 of the decline was due to less classified advertising.
- The declines this quarter were again concentrated at the newspapers in Florida and California which have been deeply affected by the troubles in the housing market.
- Total circulation revenues were up 1% mainly because of higher home delivery and newsstand prices for The Times.
- Internet revenues increased 6.7% to $85.1 million and Internet advertising revenues grew 10.2% to $74.4 million and in total Internet businesses accounted for 12.4% of the company’s revenues versus 10.6% in the 2007 third quarter.
- The About group had revenue growth of 16.1% to $28.7 million because of increased cost per click and display advertising.
In the coming months www.nytimes.com will expand its small business, personal technology and your money sections, introduce more journalists, deepen coverage in its deal book franchise, and continue to add new tools and multimedia features.
- In September page views in the business section were up 66% year-over-year and the newly-launched economy section had nearly 4 million page views in September.
- Display advertising at www.nytimes.com was strong given robust traffic growth, investments in verticals and success in selling innovative new ad formats.
Operating costs excluding depreciation and amortization and severance costs decreased 6.6% mainly as a result of lower compensation costs and benefit expense.
- Depreciation and amortization decreased 34.6% to $33.9 million from $51.8 million last year when accelerated depreciation totaled $11.7 million or $0.05 per share for assets at the Edison, New Jersey printing plant which the company closed earlier this year.
- Newsprint expense rose 2.1% stemming from a 22.1% increase in prices offset in part by a 20% decrease in consumption.
- The newsprint price increase added $11.3 million to costs and the decrease in consumption lowered costs by $10.2 million.
