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Apr 17, 2008

NEWS: NYTCo Q1 Revs Slide 4.9 Percent; Earnings Drop; Online Up 11.6 Percent

Ed: Print dries up. Like AOL shouldering the burden of losing dial-up customers, newspaper bear the 60% cost of paper, print, and delivery. 

NYT Q1: Slide Continues, Digital Not Helping

New York Times (NYT) shares have been increasing based on the saber rattling by Harbinger et al, but they may stop today: The company's Q1 shows just show how troubled the company is. EPS, excluding one-time results, came in at 4 cents, below the street consensus of 14 cents. Ad revenue contined to drop, and classifieds fared particularly badly, down 22.6%. Release.

  • Total revenues dropped 5% to $747.9 million from $786.0 million, narrowly missing the Street's $752.4 million estimate. 
  • Operating profit dropped 89% y/y to $6.2 million from $54.5 million during Q1 2007. 
  • The company posted a $335 million net loss, or break-even-per share, down from a $23.9 million, or 17 cents per share profit a year ago.
  • Excluding special items, NYT reported 4 cents EPS, missing the Street's 14 cents per share consensus.
  • Digital/Internet revenues up 11.6% y/y to $82.9 million from $74.3 million during Q1 2007. Internet ad sales up 16% y/y. Digital now 11.1% of overall sales, up from 9.5% a year ago. That's continued deceleration: Growth was 18% in Q4.
  • About Group sales up 25% to $28.2 million on higher cost-per-click ads and acquisitions, that's down from 35% growth in Q4.

A difficult quarter from NYTCo.. the newspaper publisher has announced Q1 revenue of $747.9, down 4.9 percent from $786.0 million in the year-ago period, and below the $752 million that analysts had been expecting. On a comparable basis, excluding various charges, the company earned $.04 per share, down significantly from $.17 per share in the year-ago period. The quarterly number includes an $.07 per share ($10.4 million after tax) write-down after the company reduce the scope of a major advertising and circulation project. The line from CEO Janet Robinson could describe any newspaper company right now: "Advertising revenues decreased in the quarter as weaker economic conditions compounded the effects of secular change in our business." Some highlights:

-- Revenue at the core news media business slipped 5.7 percent to $719.7 million, as advertising fell 10.6 percent. This was partly offset by revenue gains from leasing out five floors at the company's new headquarters, but negatively affected by the loss of TimesSelect revenue.

-- About Group revenue increased 25 percent to $28.2 million from $22.5 million, attributed to higher CPC advertising, as well as certain acquisitions.

-- Total internet revenue, which includes About.com, as well as the internet revenue at the core business, total $82.9 million, for an increase of 11.6 percent year-over year. Digital now accounts for 11 percent of revenue.

-- Buyout costs totaled $11.2 million in the first quarter of 2008 compared with $7.8 million the previous year; flagship NYT is in the midst of a major buyout offer so that amount is likely to grow.

-- The company continues to emphasize its cost-cutting efforts, note a decline in operating costs for the fifth consecutive quarter. Robinson said they're still on track for 2008 savings of approximately $130 million.

-- For the coming month, the company says it will see a slowdown in the rate of ad sales decline back to single digits, but this is mainly due to calendar issues and the production of an issue of KEY Magazine.

-- Separately, the company announced its March numbers: Total revenue was down 6.4 percent to $235.3 million. on an 11.1 percent dip in ad revenue. About revenues were up 22 percent to $8.2 million, while internet ad revenue was up 14.8 percent. Release.

AP adjusts to changing industry and adopts new copyright tool

On Wednesday, Tom Curley, president and CEO of Associated Press, spoke at the annual conference of the American Society of Newspaper Editors (ASNE) and the Newspaper Association of America (NAA) and stated that "the news cooperative hasn't changed its fundamental mission, but must have a more flexible business model to meet the changing dynamic of the media industry."

In order to help struggling newspapers, AP has already offered price cuts for fees paid by members,expanding video and business coverage, and creating a digital archive database that members can search. 

The AP also plans to re-price and re-package its news for its 1,500 daily U.S. newspapers, which would entail a core service for all national, state, and international breaking news with separate add-ons of premium service, instead of offering news feeds defined largely by the volume of news delivered.

Sorry, New York Times and WaPo Staffers, Here's Your Future...

newyorktimestitanic.jpgA newspaper in Madison, Wisconsin, just took the step that many newspapers will be forced to take over the next decade, many sooner rather than later: It shut down its print business, fired a third of its staff, and restructured its business to focus exclusively online. We think similar fates will eventually befall most properties owned by the New York Times (NYT), Washington Post (WPO), Gannett, (GCI), et al.

The New York Times reports:

On Saturday, The Capital Times, the city's fabled 90-year-old daily newspaper founded in response to the jingoist fervor of World War I, stopped printing to devote itself to publishing its daily report on the Web...

Thomson and Reuters complete merger

thomson_reuters-logo.pngCanada's Thomson Corp. and Britain's Reuters officially completed their integration today, creatingThomson Reuters Corp., now the world's biggest provider of financial data to trading floors according to AFP, which launched on the London stock market today. 

Reuters' former chief executive Tom Glocer is heading the new company, headquartered in New York with around 50,000 staff in 93 countries across the world.

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