OK, pretty much what we were expecting. My emphasis in bold, comments in italics.
New York Times Company Profits Plummet, 82% Drop In One Year
NEW YORK — New York Times Co.'s second-quarter earnings fell 82 percent from a year ago, when it saw a one-time gain from the sale of a unit, but print advertising continued to shrink and pulled down operating income, the publisher said Wednesday.
Net income dropped to $21.1 million, or 15 cents per share, from $118.4 million, or 82 cents per share, a year ago. In the second quarter of 2007, the company got a 66-cents-per-share boost from selling its broadcast media group but also took a 14-cent hit from other one-time items.
The results for 2008's second quarter include a one-time charge of $15.7 million, or 11 cents per share, to cover staff buyouts. Times Co., like many publishers looking to curb spending as ad revenues continue plummeting, is reducing its staff. The cut of 100 people this year is expected to produce up to $40 million in related costs over fiscal 2008.
Earnings from continuing operations slid 6 percent to $20.9 million, or 15 cents per share. Excluding one-time items, that amounts to 26 cents per share.
Analysts polled by Thomson Financial on average expected profit of 22 cents per share. Most of their forecasts excluded an estimate for buyout charges, making them more comparable to the Times' 26-cent figure.
Revenue fell 6 percent to $741.9 million and missed the Wall Street projection of $754 million.
Ad revenue dropped 11 percent, hurt mostly by a continuing decline in classified advertising.
Higher newsstand and subscription prices for the Times boosted circulation revenue 2.5 percent. [IW: so there's money in print still?]
"We saw the continued effect on our businesses of the U.S. economic slowdown and secular forces playing out across the media industry," Chief Executive Janet Robinson said in a statement. [IW: that's a nice touch - blame the economy and put down the failure of your business model to 'secular forces', unspecified.]
The flagship New York Times paper brought in 10 percent lower advertising revenue, even as industry watchers say the Times is better positioned than most >
newspapers to weather the migration of ad spending to the Internet because of its broad national appeal.
Revenue from the company's Internet properties _ which include newspaper Web sites and the About.com consumer information site _ jumped 13 percent to $91.3 million [IW: great]and accounted for about 12 percent of total revenue [IW: not so great].
That is [IW: might we say here ONLY and NOT NEARLY ENOUGH] 2 percentage points more than in the same period a year ago, but the group is not growing quickly enough to offset the decline in print ad revenue. [IW: At 2% growth for revenue that is only 12 percent of total revenue, why this obsession with the Internet?]
Times Co. cut operating costs by 2 percent [IW: well that ain't gonna do it], mostly from employing fewer staff, paying fewer bonuses [IW: Fewer? Well who's getting one?] and reducing newsprint consumption [IW = smaller newspaper, smaller news hole].
Robinson said the worsening economy and higher energy prices have continued to hit the company so far in July. Airlines, hotel operators and automakers have all curbed advertising spending, she said, adding, "We expect that will continue for some time." [IW: like a decade?]
IW: Bottom line, we're in trouble. And we better come up with smart ideas fast.
That 2% growth on Internet earnings, when it's only 12% of revenue tells me the answer does not lie in the Internet. I'll leave the mathmeticians among you to work out how long, at this rate - and a rate which might slow or stagnate, even decline - it will take the millions of dollars and hours of time poured into the Internet to compensate for the drop in print revenue.
What's needed is Newspaper 2.0.
And pretty soon I'd say.
International Herald Tribune
New York Times