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New York Times tops profit estimates on cost cuts; sales ebb
[NEW YORK] New York Times Co posted second-quarter profit that topped analysts' estimates after the publisher cut expenses faster than revenue declined.
Earnings excluding some items were 13 cents a share, the New York-based company said in a statement. That compares with the 11-cent average of estimates compiled by Bloomberg. Revenue, dropped 1.5 percent to US$382.9 million, falling short of the US$383.3 million average projection.
The publisher has been trying to attract more digital subscribers and sell online-marketing messages designed to resemble news stories. Ad revenue dropped 5.5 per cent in the quarter, dragged down by print advertising sales and print circulation as more readers get their news on the Web.
"Expense management will remain a top priority as we head into the second half of 2015, although our emphasis on digital investment and execution is also more intense than ever," Chief Executive Officer Mark Thompson said in the statement.
New York Times shares dropped 3 per cent to US$12.80 at the close in New York. They have lost 3.2 per cent this year.
Operating expenses fell 4.9 per cent, helped by declines in print distribution costs. Digital ad sales rose 14 per cent in the quarter, while print ad revenue fell 13 per cent. Circulation revenue rose 0.9 per cent to US$211.7 million. As of July 30, the publisher passed the 1 million mark in digital subscribers.
The Times recently joined other publishers in partnering with Facebook Inc. and Apple Inc to post stories directly to the tech companies' news feeds. Thompson has said the deals will increase digital ad revenues and could attract more subscribers.
The Times also continues to invest in print. It introduced a redesigned New York Times Magazine in February and a monthly men's style section in April to bolster print advertising, which still makes up a large part of revenue.
Net income rose to about US$16.4 million, or 10 cents a share, from US$9.2 million, or 6 cents, a year earlier.