New York Times misses profit estimates
New York • New York Times Co. missed second-quarter profit estimates as advertising sales declined for the 14th time in 15 quarters.
Ad revenue dropped 4.1 percent to $156.3 million, the New York-based company said Tuesday in a statement. Earnings, excluding some items, were 7 cents a share, compared with the 8 cents projected by analysts, according to the average of estimates compiled by Bloomberg. The shares fell the most in 21 months.
Jill Abramson, the first female executive editor of the Times, was fired in May as the publication — along with most news organizations — struggles to find footing in digital media, where ad rates are far cheaper than in print.
In the first quarter, Times Co. reported its first rise in ad sales in more than three years — an increase that Chief Executive Mark Thompson warned may not continue.
Times Co. expects third-quarter ad sales to decrease in the "mid-single digits" percentage, with circulation sales remaining unchanged, according to Tuesday's statement. Times Co. has a market value of about $2 billion.
Second-quarter revenue shrank less than 1 percent to $388.7 million, compared with the average estimate of $390.5 million. Circulation sales rose 1.4 percent to $209.8 million, helped by the addition of new digital subscription products such as NYT Now. The publisher added about 32,000 digital-only subscribers in the period to reach 831,000, up from the 799,000 customers at the end of March.
Net income fell to $9.2 million, or 6 cents a share, in the quarter, down from $20.1 million, or 13 cents a share, a year ago. Operating costs rose 5.2 percent to $362.7 million as the publisher continues to invest in its transition to a digital newsroom.
When Chairman and Publisher Arthur Sulzberger dismissed Abramson more than two months ago, he said she had publicly mistreated colleagues and failed to properly communicate her management decisions. He denied that gender bias played any role in the dismissal following reports Abramson had confronted Sulzberger after she reportedly discovered that she was paid less than her male predecessor.
Dean Baquet, who took over for Abramson, is trying to find a way to better negotiate the paper's business interests as digital initiatives continue to encroach deeper into editorial terrain. Abramson had chafed at the introduction of native ads, the marketing messages crafted to resemble news articles.
Those messages have nonetheless helped temper declines in the Times' ad revenue, and the publisher's online subscription plan, started in 2011, has helped spur circulation sales growth.
CEO Thompson has worked to extend the Times' paying readership by creating packages of news coverage at different prices, including a new limited plan called NYT Now that costs $8 a month, as well as a higher-end plan called Times Premier.