As low as Wall Street’s expectations were for Q2, the New York Times Company still came up short. Ad revenues dropped 10.6%. Net income from continuing operations were 15 cents per share, while the Thomson/First Call consensus expectation had been 22 cents. NYT Co. had Q2 net income of 82 cents a year ago, but that had included 66 cents from the sale of its television group, counter-balanced by 14 cents in one-time charges.
CEO Janet Robinson noted the continuing effect of the US economic slowdown and “secular forces playing out in the media industry.” As has been the case with most newspaper groups, the NYT Co. says ad revenues soften again in Q2, particularly in classified. And Q3 isn’t looking much better. “To date in July, we have seen the effects of the deepening economic slowdown, particularly in categories sensitive to the price of oil – airlines, hotels and autos, and we expect that will continue for some time,” Robinson said.
The New York Times Media Group, anchored by the namesake flagship paper and including WQXR-FM New York, did somewhat better in Q2 (or less badly) than the other parts of the News Media Group at NYT Co. Ad revenues were down only 9.5%, while circulation revenues gained 4.6%, for an overall decline of 4.4%.
The New England Media Group, anchored by the Boston Globe, saw ad revenues drop 15.1% and circulation 4.3%, for an overall drop o 9.8%.
The Regional Media Group saw ad revenues drop 16%, while circulation revenues crept up 0.1%, for an overall decline of 12.6%.
Thus, the News Media Group, in total, saw ad revenues drop 11.8% to $427.6 million. Circulation rose 2.5% to $224.2 million. “Other” gained 1.4% to $61.5 million. Total revenues were down 6.7% to $713.3 million. The operating profit decreased 4.7% to $44.5 million. Buried deep in those figures was the one bright spot, with online ad revenues associated with the media operations up 13%.
About Group, anchored by About.com, saw revenues rise 15.8% to $28.6 million. Its operating profit rose 7.1% to $9.1 million.
NYT Co. had already been actively cutting costs, but that is being stepped up. The company now expects to exceed its goal of saving about $230 million over the next two years, including $130 million this year.