New York Times Co. (Finally) Has Some Good News

Third-Quarter Results Show Improvement Due to National Ads, Circ Revenue

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NEW YORK ( -- The New York Times Co. issued its latest financial results today -- and delivered a little heartburn in the process for critics such as fund manager Hassan Elmasry, who sold Morgan Stanley Investment Management's 7.1% stake in the Times last week after complaining about its performance and dual-stock structure for years. Analysts were pleasantly surprised by the newspaper company's performance this quarter.
Janet L. Robinson
Janet L. Robinson

Revenue up 2%
The Times said revenue from July through September totaled $754.4 million, up 2% from $739.6 million in the third quarter of 2006. Operating profit, it said, grew 57.1% to $28.1 million.

Advertising revenue in the third quarter actually slipped -- by a slim 0.1% -- from the equivalent quarter last year. But this is the newspaper business in 2007; that minor decline shines compared with the gloomy developments at many other papers. Hearst Newspapers' Houston Chronicle, for one recent example, today told staff to expect a 5% work-force reduction next week as the paper tries to deal with anticipated continued declines in revenue. Nor were The Times Co.'s second-quarter and first-quarter results as encouraging.

"Our very strong earnings growth was driven by increased national advertising, higher circulation revenues and our continued focus on cost controls," Janet L. Robinson, president-CEO at The Times Co., said in a statement. "Revenues benefited from new products both in print and online. National advertising grew significantly, up 10.9%, as a result of improvement in categories such as entertainment, international fashion and corporate. Circulation revenues rose 3.9%. Our digital properties again posted very healthy revenue growth, up 26.5% in the quarter."

Digital revenue climbs 27%
And, as Ms. Robinson stressed, the company's digital revenue jumped 27% in the third quarter, bringing its share of overall revenue to 10.6% from 8.5%.

To be sure, it was not all great news. Classified advertising, particularly in real estate, decreased again. Advertising- and circulation-revenue at the company's New England Media Group, which includes The Boston Globe, continued its long slide. Selling the company's 50% stake in the Discovery Times cable channel brought a $7.8 million loss, or $4.3 million after tax.

But the overall report beat analysts' expectations. "The New York Times blew the top off," Benchmark analyst Ed Atorino told Reuters.
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