New York Times Posts Declines in Both Print, Digital AdvertisingBy
The Times added 67,000 net digital subscribers last quarter
Newspaper spending $50 million to expand digital globally
New York Times Co. posted second-quarter revenue that missed analysts’ estimates after the newspaper publisher saw declines in both print and digital advertising.
Revenue fell 2.7 percent to $372.6 million, trailing analysts’ estimates of $375.5 million, according to a statement Thursday. Profit excluding some items was 11 cents a share, matching the average of estimates compiled by Bloomberg.
The results are a setback to the Times’ strategy of increasing online advertising to offset falling print ad sales. Print declines accelerated from the first quarter of the year -- from a 9 percent drop to a 14 percent drop -- while digital ad revenue slumped for the second quarter in a row. A mix of mobile and video advertising and sponsored content, or ads that resembled stories, couldn’t make up for a drop in traditional online display ads.
The newspaper aims to double its internet revenue in the next four years by adding paid online subscribers overseas and attracting more young readers. As part of that effort, the company is spending $50 million over the next three years to expand its digital audience around the world.
The Times signed up 67,000 net digital subscribers, who include both online news readers and crossword puzzlers. The Times now has 1.42 million paying digital-only subscribers.
Amid a digital push, the Times is also cutting costs. In May, the paper offered buyouts to members of its newsroom and business departments, without ruling out the possibility of layoffs.
The shares slipped 0.6 percent to $12.72 at 9:35 a.m. The stock had fallen 4.7 percent this year through Wednesday’s close.
- Ad revenue for the quarter fell 11.7 percent, dragged down by a 14 percent drop in print display ad sales as well as a 6.8 percent decrease in digital ad sales.
- Digital advertising revenue was $45 million in the quarter, or 34 percent of total ad sales, compared with $48.3 million, or 32.5 percent, in the second quarter of 2015.
- Revenue from the company’s digital-only subscriptions, which include news and crosswords, rose 15.3 percent from the second quarter of 2015, to $56.4 million.
- Operating costs decreased to $339.9 million compared with $344.8 million a year earlier, largely because of lower non-operating retirement costs.
- Operating profit fell to $9.1 million from $38.1 million last year. The company attributed costs associated with streamlining international print operations and pension plans and lower advertising revenues.