New York Times Co. (NYT) lifted its advertising sales for the first time in more than three years, in what may be a fleeting bright spot in Chief Executive Officer Mark Thompson’s turnaround efforts.
Ad revenue rose 3.4 percent to $158.7 million, boosted by a 3.7 percent gain in the print business that outpaced digital sales. That helped the publisher report earnings of 7 cents a share, excluding one-time items, beating analysts’ average estimate of 3 cents.
While Thompson said sales were helped by a push into native advertising, which lets marketers pay to post their own content on the Times website, he also warned that the increases may not continue. The company had posted ad sales declines for the prior 13 quarters as it struggled to replace print ads with digital sales, exacerbated by executive turnover amid budget cuts.
“We’re pleased with this result, which we believe demonstrates the progress we are making in both performance and innovation in advertising,” Thompson, who took the helm in November 2012, said in the statement. “However, we are certainly not claiming victory in advertising yet; we expect continued month-to-month volatility and recognize that we will face some significantly tougher year-on-year comparisons as the year goes on.”
The company said ad revenue in the second quarter is expected to drop by a mid-single-digit percentage, while circulation sales will rise by less than 5 percent.
Times Co. shares rose 1.3 percent to $16.83 today.
Thompson has also been working to lure more subscribers by creating packages of news coverage at different prices, including a new limited plan called NYT Now that costs $8 a month, as well as a higher-end plan called Times Premier for $45 a month. A regular online subscription costs $15 on a monthly basis.
The company added 39,000 digital-only subscribers to reach 799,000, an 18 percent gain from a year earlier. That compared with growth of 19 percent in the fourth quarter of 2013. Total circulation revenue rose 2.1 percent to $209.7 million.
First-quarter net income fell to $1.74 million, or 1 cent a share, from $3.57 million, or 2 cents, a year ago, the New York-based company said today in a statement. Total revenue increased to $390 million, compared with the $385 million that analysts estimated on average.
The publisher had about $288 million in cash and marketable securities, minus debt, at the end of March. The company reinstated a dividend in October after a five-year pause, at an annual cost of about $24 million. The Ochs-Sulzberger family, which controls the Times, stands to make as much as $3.1 million a year from the payouts, far smaller than the $20 million it got as recently as 2008.
To contact the editors responsible for this story: Sarah Rabil at email@example.com Stephen West