The New York Times Co. said it modestly slowed its advertising declines in the fourth quarter as online subscription business continued to grow, contributing to better profits than Wall Street had expected.
New York Times Slows Ad Declines (Slightly), Adds More Digital Subscribers
But 2012 as whole yielded one particularly interesting result, according to the numbers The Times Co. released Thursday: Across the full year, the company recorded more circulation revenue than ad revenue for the first time, drawing in $953 million in subscription fees and $898.1 million in ad dollars. It's a milestone that upends the traditional 80-20 ratio between ads and circulation that publishers once considered a healthy mix and that is no longer tenable given the industrywide decline in newsprint advertising.
Net income tripled in the fourth quarter to $177.2 million, or $1.14 a share, compared with $58.9 million, or 39 cents, a year earlier, the company said today in a statement. The fourth quarter included an extra week in 2012, boosting gains. Excluding some items, earnings were 32 cents, beating the average analyst estimate of 31 cents, according to data compiled by Bloomberg.
The Times Co., led by Chairman Arthur Sulzberger, still faces a difficult advertising market as national marketing spending continues to subside industry-wide. Unlike regional newspapers, the New York Times relies on national advertising from major marketers such as movie studios, car companies and luxury goods for most of its money. National advertising dropped 10% across all newspapers in the first nine months of last year, according to the Newspaper Association of America. The Times Co. also owns the Boston Globe and the International Herald Tribune.
Fourth-quarter advertising slid to $265 million, down 8.3% from a year earlier, excluding the effect of an extra week in the fourth quarter of 2012. That slide compared with an 8.9% decline in the third quarter.
Circulation revenue rose 8.6% to $241 million in the fourth quarter as subscribers to digital editions of the New York Times and International Herald Tribune increased 13.1% from September to 640,000. The Times made plain its interest in further expanding that revenue when it recently surveyed subscribers on potential new digital products such as NYT Junior, DealBook Pro and even an ad-free version.
Total revenue climbed 5.2% to $575.8 million. Analysts had predicted $570.4 million.
The New York Times eliminated 30 newsroom jobs last month, out of a total of 1,150, because of the slowdown in advertising.
~ Bloomberg News and Ad Age staff ~