New York Times Co. (NYT) Thursday reported a plunge in first-quarter profit, due mainly to the absence of one-time gains recorded last year. The company's revenues also declined as a steady drop in ad revenues offset digital subscription growth. Nonetheless, earnings for the quarter were in line with estimates, while revenues came in short.
Commenting on the results, CEO Mark Thompson said, "Our first-quarter results reflect our continued strides in reshaping The New York Times Company. The increase in operating profit, excluding depreciation, amortization and severance, was driven by solid growth in circulation revenues coupled with tightly managed costs, which were lower despite ongoing investment in our high-quality journalism and digital operations."
Operating profit, excluding depreciation, amortization and severance, rose 3.4 percent.
New York Times, the publisher of its namesake newspaper, Boston Globe and the Telegram, said revenues for the quarter declined 2 percent to $465.9 million from $475.4 million last year. Analysts expected revenues of $470.45 million for the quarter.
Advertising revenues fell 11.2 percent to $191.2 million from a year ago, but was somewhat offset by circulation revenues which advanced 6.5 percent to $241.8 million, reflecting the company's strategy to charge for its digital products.
Paid digital subscriptions across the company totaled about 708,000 at quarter end, an increase of more than 45 percent year-over-year from the end of the first quarter last year.
"At the same time, the difficult advertising environment has continued, though there are currently some signs of improvement in the second quarter," Thompson added.
Total operating costs for the quarter dropped 4.3 percent to $443.1 million from $462.8 million last year.
New York Times first-quarter profit plunged to $3.14 million or $0.02 per share from last year's $42.13 million or $0.28 per share last year. Last year results include $0.22 per share from discontinued operations.
Last year's discontinued operations included the gain from sale of its Regional Media Group, consisting of 16 regional newspapers, and a stake in Fenway Sports Group.
Adjusted earnings from continuing operations were $0.04 per share compared to $0.05 last year. Analysts polled by Thomson Reuters expected earnings of $0.04 per share. Analysts' estimates typically exclude special items.
Looking ahead, the company expects circulation revenues to increase in the mid-single digits in the second quarter, while ad revenue trends are expected to be somewhat better sequentially.
NYT is currently trading at $9.21, up $0.21 or 2.33%, on a volume of 3.32 million shares on the NYSE.
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