New York Times Shares Fall as Ad Sales, Circulation Decline

New York Times Revenues Fall
The New York Times website is shown on a computer monitor. Photographer: Andrew Harrer/Bloomberg

New York Times Co., publisher of the namesake newspaper, fell after reporting first-quarter revenue that trailed analyst estimates as advertising sales and circulation declined.

Revenue dropped to $566.5 million from $587.9 million a year earlier, the New York-based company said in a statement today. Analysts had projected $569 million, according to the average estimate from a Bloomberg survey. Earnings per share, excluding one-time expenses, were 2 cents, meeting analysts’ estimates.

Advertising revenue slid 4.4 percent to $299 million compared with a year ago, though digital ad sales rose 4.5 percent. Circulation revenue declined 3.7 percent to $228 million.

“Tight cost controls could not shield print ad weakness,” said William Bird, an analyst at Lazard Capital Markets who rates the shares “sell,” in a research note.

Times Co. said ad revenue trends in the first half of April are in line with those of the first quarter, which may lead analysts to lower their earnings estimates, Bird said.

The company’s stock fell 20 cents, or 2.2 percent, to $8.92 at 4 p.m. in New York Stock Exchange composite trading. The stock has declined 9 percent this year.

“The advertising marketplace faced increased pressure in the first quarter, reflecting the uncertain economic environment,” Chief Executive Officer Janet Robinson said in a conference call.

Paywall Introduction

Times Co. said more than 100,000 people signed up for new digital subscriptions, after it introduced a so-called paywall March 28. The pay system requires customers to purchase online content, often after they’ve read more than 20 articles, and led to an increase in home-delivery print subscriptions in April, Robinson said in the conference call.

“My break-even number for subscriptions for 12 months is 200,000, and the Times is already at 100,000 after three weeks,” said Douglas Arthur, an analyst at Evercore Partners in New York who has an “overweight” rating on shares and doesn’t own any. “That’s a pretty good number.”

Operating costs excluding depreciation, amortization and severance increased 0.3 percent to $506 million, primarily due to higher promotion and newsprint expense, the company said. is the world’s most viewed English-language newspaper site, receiving about 62 million unique visitors in the month of March, according to comScore Inc. In the first 12 days after the company instituted its paywall, site usage fell between 5 and 15 percent most days, according to Experian Hitwise.

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