This summary is based on the first quarter fiscal 2007 earnings call conducted by The New York Times Company (NYT: chart) on April 19, 2007.
Management:
President, Chief Executive Officer, Director: Janet L. Robinson
Chief Financial Officer, Senior Vice President: James M. Follo
Senior Vice President, Digital Operations: Martin A. Nisenholtz
Senior Vice President and Chief Advertising Officer, Times Media Group: Denise Warren
Investor Relations: Catherine J. Mathis
Key Investors Issues
- Earnings per share from continuing operations were 14% compared with 21% in the same period a year ago.
- Depreciation and amortization totaled $44 million versus $35 million in the same period last year.
- CapEx totaled $114 million, including $78 million for new headquarters.
First Quarter Highlights
Earnings per share from continuing operations were 14% compared with 21% in the same period a year ago.
Excluding special items, the company earned 25 cents per share from continuing operations, which was the same as the comparable number in the first quarter of 2006.
The special items were: a charge of 3 cents per share for staff reductions compared with 4 cents in the same quarter last year, 5 cents per share for accelerated depreciation expense for assets at Edison New Jersey printing plant, which the company is in the process of closing and 3 cents per share for an unfavorable tax adjustment, primarily due to a change in New York State tax law.
The company added an issue of Key, the New York Times real estate magazine, and an issue of Design New England, the Globe’s high-end magazine devoted to home and garden.
- The company added many new advertising positions, both in print and online, which have proven successful.
- In December, the company relaunched the Times’ travel site, which provides information on more than 1,000 destinations around the globe. With the relaunch, traffic grew more than 50%.
R&D continues to collaborate with boston.com’s local search initiative.
- Research and development is working with about.com and all newspaper units to introduce more video and a suite of services for mobile that will begin to roll out in the third quarter.
- In January, the company announced an agreement to sell the Broadcast Media Group for $575 million. The company is selling its radio station, WQEW-AM, for $40 million.
At the Times Media Group, ad revenues decreased 4%.
Categories that performed well included: international fashion, which rose 23%, as designers heavily promoted their spring fashions, particularly in key women''s fashions, which was the largest issue in 23 years, books, which increased 28% as the Times benefited from campaigns for popular new novels in the daily paper, and fine arts, which increased 38% due in part to the shift in the special museum section from April last year to March.
Entertainment advertising, which trended down throughout last year, decreased 4%, mainly because of reduced spending by the studios for films that did not perform well at the box office.
Live entertainment rose 10% due to growth in advertising from new Broadway shows and new advertising positions.
Three categories where the company saw declines were residential real estate, which decreased 8% because of the decline in the local and national housing markets, telecommunications, which was down 32% as wireless carriers reduced spending and last year benefited from increased advertising from the merger of AT&T and SBC, and automotive, down 21% mainly due to less advertising from domestic automakers.
The New England Media Group continues to grapple with a soft economic climate and consolidation among major advertisers.
- Advertising revenues decreased 4%.
- Ad revenues in the national category at the New England Media Group rose 6% due to growth in telecommunications, travel, network TV and cable, club and concert, and health care-related advertising.
- In March, advertising revenues for the New England Media Group grew 2%.
