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New York Times Revenue Increases on Digital Ad Rise
New York Times Co., publisher of the namesake newspaper, reported the first increase in quarterly revenue in more than two years as digital advertising growth helped offset a continued decline in print advertising.
Second-quarter revenue rose to $589.6 million from $584.5 million a year earlier, the company’s first year-over-year increase since the third quarter of 2007. Analysts surveyed by Bloomberg had expected revenue to drop to $576 million.
Times Co. is benefiting as marketers boost spending following last year’s advertising recession and an increasing share of the money moves to the Internet, the company said.
“These numbers clearly demonstrate the positive impact of transitioning into an increasingly multi-platform company,” Janet Robinson, chief executive officer, said on a conference call. “Our healthy online growth is coming in multiple categories--national display advertising, retail display advertising and also real estate classified advertising.”
Digital advertising revenue surged 21 percent in the quarter, reaching 26 percent of total ad revenue from 22 percent a year earlier, the company said. Print advertising decreased 6 percent. Total ad revenue was $314.9 million, little unchanged from the previous year, while circulation revenue rose 3.2 percent to $234.8 million.
“That was a hell of a quarter. The digital revenue just exploded,” said Ed Atorino, an analyst at Benchmark Co. in New York, who recommends the shares. “Revenue was better than I thought and the bottom line was better than I thought.”
Industry Struggles
Net income was $32 million, or 21 cents a share, compared with $39.1 million, or 27 cents, a year earlier, the New York- based company said today in a statement.
Standard & Poor’s Ratings Service raised Times Co.’s corporate credit and senior unsecured debt ratings to B+, from B, after the report, cited improving advertising revenue.
Industrywide, newspaper print advertising sales fell 11 percent to $5.25 billion in the first quarter of 2010, according to Newspaper Association of America data. For 2009, newspaper print advertising sales were down 29 percent from the previous year, the lowest level since 1984.
Online newspaper ad sales, which account for about 10 percent of all ad revenue, were down 12 percent for 2009. In the first quarter of 2010, online ad sales increased 4.9 percent to $730.4 million, the first rise since 2008.
Times Co. rose 11 cents, or 1.2 percent, to $9.16, in New York Stock Exchange composite trading. The stock has declined 26 percent this year.
New Online Model
The New York Times is preparing to unveil in January its new online subscription model, which will make much of its Web content available only to visitors who pay fees for access. The company is also planning to sell an enhanced application for Apple Inc.’s iPad, which will be offered in addition to the free app currently available on the device.
Revenue at Times Co.’s websites, including NYTimes.com, About.com and Boston.com., increased 20.5 percent to $94.3 million. Internet advertising revenue at the websites increased 19.8 percent to $50.4 million, mainly due to growth in national display advertising, the company said.
In April, News Corp.’s Wall Street Journal introduced a New York City section to compete with the New York Times for local advertising and readers. Robinson said last month the Times Co. newspaper’s circulation was holding up to the competition.
On today’s conference call, Robinson declined to give her opinion of the Journal’s new section. “Anyone can look at the section and make their own judgment,” she said.
To contact the reporter on this story: Brett Pulley in New York at bpulley@bloomberg.net
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